Product entry , non-price competition , niche , strategy , submarkets , entertainment goods , video games
Abstract:
This paper investigates how video game publishers’ choice of game release date is affected by
the expected level of competition within the game’s product niche. We identify game niches by
genre, age-appropriateness, a four week window cohort, publisher and console system. Our
analysis is based on two different video game data sets, one based on industry sales data and
the other featuring extensive consumer usage information. We show that consumer substitution
across games is stronger within most of the dimensions describing product niches. Sales
volumes decay quickly after the opening weekend, so at any point in time, a niche will
typically be served by few current titles. Thus, publishers have incentives to avoid releasing
during periods of fierce intra-niche competition. We show that games are more likely to be
released so as to avoid weeks when their niche is relatively well served.
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