Learn from other industries: How to be successful in the video game industry

Publicerat 5 March 2018

At KTH Executive School we have several times seen the strength when companies from different sectors, but with similar problems, meet and learn from each other. Inspiration on new ways to define and work with a problem can lead to wonderful results – and you don’t have to be afraid to discuss openly about your challenges since you don’t compete with each other.

A growing (and very successful) industri in Sweden is the gaming industry. This text is the first in a series about success factors and learnings from that industry. The insights are based on a report produced by researchers from KTH.

Do you want to meet executives from other industries in order to develop you company? Read more about our group formats.

How to be successful in the video game industry

Sweden’s position as a top game developer nation has been corroborated by interviewed industry experts, who often compare Sweden and to some extent Finland with international game development “hubs” in USA, Korea, Japan, and regions in Canada like Quebec. In addition, in 2015 Sweden was elected the leading game developing country in Europe in for the second year in a row, in surveys connected to the European Game Developers Conference.

The explanation for the success of Sweden as a nation has to lie within the reasons for the success of the companies that are active here. One approach to investigate the performance of firms competing in the same industry is to identify the industry’s key success factors (Ohame, 1982). The key success factors (KSF) are those few things that enable a company to win over competitors if executed really well, even if the performance in other less crucial areas is mediocre. Consequently; if Sweden’s game developers stand out in international comparison, it should be possible to trace the sources of advantage through their superior performance in KSF. The search for a common denominator for success that
i) is applicable to all the competitors
ii) has a decisive relevance,
iii) is possible for firms to influence, led to the identification of three KSF.

To have success with video games it is necessary to:

  1. Produce really good games [find out more]
  2. Reach through the market noise [find out more]
  3. Build a professional team  [find out more]

KSF are often obvious when they are pointed out but it is very useful to identify them, because it helps explaining performance in the industry. They can also be used as a base for forming strategies which leverage effective resource allocations. But first they need to be analyzed further. Click on the links for an unbundeling of each KSF.

The two first KSFs helps us understand how to have success with individual games. But while game success requires mastering both these KSF, there is also some link between them. From marketing research we know that if the customer has an experience that is satisfying enough to create delight, he or she may aid the market penetration efforts by recommending the game to others. In other words; a really good game that delights customers can benefit from word-of-mouth support, which under the right circumstances can cause the much desired viral spread of a game. In order to delight customers, the experience needs to exceed expectations. Unfortunately expectations change all the time, as previous attributes of delight become expected features in the next generation of products (Berger et al, 1993). In an area with much innovation and fast technical progress, such as video games, any static definition of quality is bound to become obsolete very quickly.

The third KSF concerns how to attain sustainable competitive advantage. Its is about building a firm rather than just a game. A firm that can have repeated successful game launches without relying on luck alone. Or in other words, how to transform from a start-up with a first successful launch to a firm with a superior game development capability. The analysis suggest that it has a lot to do with how development teams are composed, managed, developed and maintained.

Ohame, K. (1982). The Mind of the Strategist, McGraw-Hill.

The article is original from here.