Vertical Integration, Exclusivity and Game Sales Performance in the U.S. Video Game Industry

Ricard Gil and Frédéric Warzynski

MPRA Paper from University Library of Munich, Germany

Abstract: This 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.

Keywords: vertical integration; exclusivity; performance; video games (search for similar items in EconPapers)
JEL-codes: D23 L14 L20 (search for similar items in EconPapers)
Date: 2009-12, Revised 2009-12
New Economics Papers: this item is included in nep-com and nep-mic
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https://mpra.ub.uni-muenchen.de/21049/1/MPRA_paper_21049.pdf original version (application/pdf)

Related works:
Journal Article: Vertical Integration, Exclusivity, and Game Sales Performance in the US Video Game Industry (2015)
Working Paper: Vertical Integration, Exclusivity and Game Sales Performance in the US Video Game Industry (2010)
Working Paper: Vertical Integration, Exclusivity and Game Sales Performance in the U.S. Video Game Industry (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:21049

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