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Community sensing capabilities in the video game industry: Utilizing information in user communities to impact product performance
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Firms in the video game industry have a tradition of drawing on user communities for information about user needs, demand and product use that is conducive to product innovation. This study investigates the outcomes of a community sensing capability that allows video game firms to utilize externally located information about user needs, demand and product use to drive product innovation. Building on previous research on sensing capabilities and innovation literatures, the capability is defined as the ability to identify and internalize innovation-conducive information from user communities. The paper hypothesizes that the community sensing capability used in development projects increases levels of information about user needs, demand and product use. This, in turn, is predicted to positively affect the financial performance of products. To test these hypotheses, cross-sectional data from 151 development projects in the video game industry are analyzed using structural equation modeling (SEM) with LISREL software. Empirical results provide support for the theoretical argument and demonstrate indirect effects on performance. The model further identifies an inconsistent mediation effect between community sensing and financial performance, as without increased levels of information about users as an outcome, sensing processes have a negative impact on performance. Implications for and contributions to research on sensing capabilities are formulated in addition to extant research on user communities in open innovation contexts. Insights for management based on the findings are also outlined.

Keywords [en]
User communities, sensing capability, dynamic capabilities, video game industry, open innovation
National Category
Business Administration
Identifiers
URN: urn:nbn:se:uu:diva-381038OAI: oai:DiVA.org:uu-381038DiVA, id: diva2:1302044
Available from: 2019-04-03 Created: 2019-04-03 Last updated: 2019-04-03
In thesis
1. Managing Digital Open Innovation with User Communities: A Study of Community Sensing and Product Openness Capabilities in the Video Game Industry
Open this publication in new window or tab >>Managing Digital Open Innovation with User Communities: A Study of Community Sensing and Product Openness Capabilities in the Video Game Industry
2019 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Digital and open innovation has changed how product innovation occur and how it is managed by firms. Digital technology as an enabler of increasingly distributed innovation processes has in particular impacted firms’ abilities to draw on, and leverage, large numbers of external users and user communities to develop their offerings. In the video game industry, firms have developed and honed capabilities to utilize user communities as sources of information and modular user innovations. Empirical evidence of the performance effects in product innovation as well as conceptualizations of these capabilities is however lacking in extant research. Grounded in a dynamic capability perspective, this dissertation puts forward two capability concepts and tests their effects empirically in the context of the video game industry. First, the concept of a community sensing capability captures the firm’s ability to identify and internalize innovation-conducive information from user communities. This capability entails managing openness in the firm’s innovation processes. Second, the concept of a product openness capability relates to the firm’s ability to create and manage products functioning as platforms for continuous development and coupling of internal and external innovation. This, in turn, involves managing openness in individual products. Using both qualitative and quantitative methods, these capabilities are examined at the project level of analysis in relation to the financial performance of products and the speed of development processes. The findings show the capabilities to be indirectly related to the financial performance of products. The application of community sensing capabilities in development of video games increases the amount of information about user needs, demand and product use possessed by the firm, which in turn positively impacts performance. Designing products open to external innovation by users in turn increases the development speed of products, which positively impact the financial performance of products. The two capabilities are also shown to be interlinked as community sensing has a positive impact on product openness. The dissertation contributes at the intersection of open and digital innovation in addition to previous work on sensing capabilities. The work also holds practical relevance by showing the potential of utilizing user communities for digital product innovation.

Place, publisher, year, edition, pages
Uppsala: Department of Business Studies, 2019. p. 91
Series
Doctoral thesis / Företagsekonomiska institutionen, Uppsala universitet, ISSN 1103-8454 ; 199
Keywords
User communities, open innovation, dynamic capabilities, video game industry
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:uu:diva-381041 (URN)978-91-506-2755-8 (ISBN)
Public defence
2019-06-13, Hörsal 2, Ekonomikum, Kyrkogårdsgatan 2, Uppsala, 13:15 (English)
Opponent
Supervisors
Available from: 2019-05-21 Created: 2019-04-03 Last updated: 2019-05-21

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