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The impact of user-generated content authorization on demand in the game industry

Author

Listed:
  • Hidetaka Oshima

    (International University of Japan)

  • Shinichi Yamaguchi

    (International University of Japan)

Abstract

The expansion of information exchanges via social media among consumers has dramatically changed the consumer purchasing process. We empirically analyze how user-generated content (UGC) authorization impacts the demand for Japanese video games. There are three important evolutionary points to consider. First, we focus on the gaming industry, under-researched yet seeing increased engagement with UGC, where gameplay authorization surged from 0.20 in 2017 to 0.55 in 2021. Second, we use a structural demand model that explicitly incorporates whether there is authorization or non-authorization of gameplay. Third, we estimate the heterogeneity of goods using BLP with a two-step nested logit model. As a result, the publishing and official authorization of gameplay guidelines are shown to have a significant positive impact on the sales of video game software, with a change in the demand structure for game software in 2021. Distinctively, genre classification (upper nest) and gameplay authorization status (lower nest) were significant, with the former outweighing the latter. This indicates a consumer’s propensity to select a game genre prior to seeking gameplay information, with gameplay authorization status subsequently impacting interest levels and final game choice.

Suggested Citation

  • Hidetaka Oshima & Shinichi Yamaguchi, 2023. "The impact of user-generated content authorization on demand in the game industry," SN Business & Economics, Springer, vol. 3(11), pages 1-26, November.
    • Handle: RePEc:spr:snbeco:v:3:y:2023:i:11:d:10.1007_s43546-023-00573-7
    DOI: 10.1007/s43546-023-00573-7
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    References listed on IDEAS

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    More about this item

    Keywords

    Game industry; User-generated content; Gameplay; Social media; Copyright;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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