Determinants of the choice for a commercialization strategy by Dutch independent game developers

Abstract

Since 2010 the number of small creative high-tech start-ups, i.e. independent developers (IDs) in the Dutch gaming industry has increased rapidly. This is due to advancements of the Internet, which made it possible to release games on digital platforms and create a direct distribution channel to users. As a result, competition in the market increased enormously and IDs are inclined to follow a rat race strategy. This strategy consists of little commercialization by releasing a new game on only one platform and immediately afterwards start to develop the next new game. However, in this way, the IDs only reach users that are actively searching for new games. Consequently, they miss out on reaching the general public. Accordingly, IDs generate low revenues and have a low chance of survival. In order to increase the chances of survival, IDs must intensify their commercialization strategy. This research aims to determine which factors influence Dutch IDs to choose a more intensive commercialization strategy. For that purpose, an explanatory qualitative research design is applied, which makes it possible to obtain in-depth insights into IDs’ strategy choices. Twelve motives and ten characteristics that may influence the choice of strategy were identified from previous literature. By conducting thirty semi-structured interviews with Dutch IDs, the influences of these motives and characteristics have been empirically assessed. The influencing factors of each IDs’ strategy choice were analyzed and compared. From these analyses it is concluded that there are a number of crucial factors for choosing a more intensive commercialization strategy than a rat race strategy. These factors include the motives of increasing salary/profit, image building/branding and firm viability, and the characteristics of age of ID-team members, firm age and external financial assets. Furthermore, the results show that IDs have the best chances of survival with a diversification strategy. This entails releasing a game on multiple platforms while targeting market niches. Diversification decreases the risk of not gaining enough revenues to survive. However, many contemporary IDs choose other less successful strategies. In order to make a better strategy choice, policy changes and changes at educational institutions and incubators are needed. More focus should be placed on business development and commercialization. This can be done by giving more attention to the commercial side of the game development process in order to create a better balance between the technical and commercial development of a game by IDs.