Master thesis

Is it game over for physical retailers? A study on Swedish

Authors: Farhana, Mosarrat Swietlicki, Daniel Tutor: Sattari, Setayesh Examiner: Pehrsson, Anders Semester: VT20

Subject: Business Administration : Advanced Course code: 5FE05E

Abstract

Purpose - The purpose of this study is to extend the understanding of the business model of video game retailers using online and physical stores focusing on the impact of digital platforms on the retailing industry within the context of considering different actor’s perspectives like retailers and consumers.

Design/methodology/approach - This is a multiple-case study based on deductive reasoning. In this qualitative study, two cases of click-and- retailers operating in the Swedish video game industry have been considered along with feedback from customers. Online personal interviews and semi-structured interviews have been conducted with retailers and customers respectively. Both primary and secondary data have been used to conduct the study.

Findings - Findings show that video game retailers need to encourage engagement through incentives and other activities in order to create value and change up their formats and strategies through pricing to reach new customers and focus on of their online store fronts to convey trustworthiness.

Research limitations - A major limitation has been the COVID-19 pandemic spreading during the writing of this paper, which resulted in companies backing out to refocus their efforts. Another limitation has been the legal aspect as companies owned by bigger publishers denied to take part in the study to avoid revealing sensitive information.

Practical implications - It offers some insightful practical suggestions to retailers who are struggling hard to adopt digital transformations in the industry.

Originality - Authors’ proposed research model, based on Sorescu et al. (2011)’s business model and the empirical findings, contribute in the less explored domain of research on business models from retailer’s perspectives. Moreover, it adds values in industry specific study like the video game industry in Sweden considering all actors, which is argued as scarce.

Keywords - Business model, Retailing Business model, Click-and-mortar, Video game industry

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Acknowledgements

This master's thesis has been carried out as part of the completion of the Masters Programme in at Linnaeus , Vaxjö, Sweden, during spring 2020 by Daniel Swietlicki and Mosarrat Farhana. We would like to express our sincere gratitude and appreciation to a list of wonderful people who have made the journey of this research process possible through their valuable inputs and support. At first, we would like to thank our examiner Professor Anders Pehrsson for his valuable suggestions and guidance as well as insightful feedback during all seminars. His words have encouraged us to broaden the horizon of this research. We would also like to thank our tutor, Dr. Setayesh Sattari for her continuous support and guidance to improve the quality of our research. During the outbreak of COVID-19 pandemic, we have gone through the moment of ‘paralyzing’ in our process. In that situation, our tutor has motivated us to be optimistic and has given us thoughtful practical suggestions to complete this research on time without compromising the quality. Moreover, we would like to thank our beloved families and friends for being there to support and motivate us. Finally, we would like to extend our deep gratitude to all participants and two retailers of the video game industry in Sweden for their valuable time, effort and thoughtful contributions in this study. Thank you!

Daniel Swietlicki Mosarrat Farhana

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Table of contents 1. Introduction ...... 1 1.1 Background ...... 1 1.2 Problem ...... 3 1.3 Purpose and delimitations ...... 6 1.3.1 Research questions ...... 6 1.4 Report structure ...... 6 2 Literature review ...... 8 2.1 Business model and impact of digitalization ...... 8 2.1.1 Classification of e-business ...... 10 2.2 Retail business model (RBM) ...... 17 2.3 Video game industry ...... 19 3. Conceptual framework ...... 21 3.1 Key concepts...... 21 3.2 Proposed research model ...... 23 3.3 Assumptions ...... 23 4. Method ...... 25 4.1 Research approach ...... 25 4.2 Research design ...... 25 4.3 Research strategy ...... 26 4.4 Data collection method ...... 27 4.5 Data collection instruments ...... 28 4.5.1 Structured interview schedule & interview guide ...... 28 4.5.2 Operationalization ...... 29 4.6 Selection of cases and respondents ...... 30 4.7 Data analyzis method ...... 32 4.8 Ethical considerations ...... 33 4.9 Quality criteria ...... 34 4.10 Methodology Summary ...... 35 5. Information on retailer cases ...... 36 5.1 Retailer Blue ...... 36 5.2 Retailer Green ...... 37 6. Analyzis and results ...... 38 6.1 Empirical data presentation ...... 38 6.1.1 Retailers ...... 38

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6.1.2 Customers ...... 41 6.2 Analyzis ...... 43 6.3 Corroborating themes ...... 50 7. Discussion ...... 54 8. Conclusions and contributions ...... 59 8.1 Conclusions ...... 59 8.2 Theoretical contributions ...... 60 8.3 Managerial implications ...... 61 9. Limitations and further research...... 63 9.1 Limitations ...... 63 9.1.1 COVID-19 data collection interference ...... 63 9.1.2 Legal and contractual limitations ...... 63 9.2 Further research ...... 64 10. References ...... 65 Appendix 1: Structured interview schedule and interview guide ...... 75 Appendix 2: Retailer scripts ...... 77 Appendix 3: Customer scripts ...... 81

List of Figures

Figure 1: Research model………………………………………………………………….....23 Figure 2: Modified research model………………………………………………………..…57

List of Tables

Table 1: Summary of relevant articles…………………………………………….…………12 Table 2: Operationalization…………………………………………………………………..30 Table 3: Quick facts on retailers ……………………………………………………………..31 Table 4: Methodology summary……………………………………………………………..35 Table 5: Connection across different sets of codes……………………………………………51 Table 6: Corroborating themes……………………………………………………………….52

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1. Introduction

This chapter presents an introduction to the field of study and theoretical foundation within the domain of e-commerce and retailing in the video game industry. Furthermore, the chapter depicts the changing business environment in the video game industry and continues with a problematization of the field under study, following previous research works. Finally, the research gap and research question are stated along with the delimitations and the purpose of the study; and it ends with an outline of the thesis.

1.1 Background

The exponential growth of the business-to-consumer (B2C) e-commerce activities in the world marketplace has brought revolutionary transformation in retailing and it has grown dramatically since 1997 (Otto and Chung 2000; Doong et al. 2010). According to Statista, in 2018 approximately 1.8 billion people worldwide purchased online from brick-and- mortar retailers like Walmart as well as from web-only retailers like or and in 2021 over 2.14 billion people worldwide are expected to do online purchase (Clement 2019). Following the e-commerce activities, organizations have become more diverse and researchers have defined three types of e-commerce organizations like (1) completely physical companies - ‘brick-and-mortar’, (2) companies using some e-commerce activities as marketing channels - ‘click-and-mortar’, and (3) companies only based on e-commerce activities - ‘virtual organizations’ (Turban et al. 2009; Doong et al. 2010). The retail industry has witnessed disruptive changes every 50 years or so, due to ongoing technological advancement and societal changes (Rigby 2011). The emergence of digitalization of retailing along with omnichannel concept has transformed consumer’s behavior and expectation in favor of the digital platform of brick-and-mortar retailers (Betzing et al. 2018). History shows that over time each wave of change did not abandon the earlier format, rather it has reshaped the landscapes of the retail industry by adopting new changes in the old format and redefined consumer’s expectations (Rigby 2011). Retailing as a core function of all economies will not be extinct in the near future, but traditional brick-and-mortar physical retailers will endanger their existence without adopting the concept of digital retailing in their business model (Reinartz et al. 2019; Rigby 2011). Since virtual organizations are enjoying some crucial

1 operational benefits such as reduced cost, 24/7 open store, less communication cost along with no geographical barriers and so on, a growing number of brick-and-mortar companies have turned into click-and-mortar ones (Doong et al. 2010; Otto and Chung 2000; Steinfield et al. 2002). Moreover, as an inevitable part of the e-commerce platform companies can offer consumers more personalized services based on their provided personal data and can also design tailored advertisements to reach the target audience (Zhu et al. 2017; Piotrowicz and Cuthbertson 2014; Reinartz et al. 2019; Rigby 2011).

To combat the fierce competition, brick-and-mortar retailers have integrated different in-store digital like self- terminals, in-store assistant, , virtual mirrors, QR codes and so on to uplift consumer's shopping experience through multiple channels (Piotrowicz and Cuthbertson 2014; Betzing et al. 2018). But the pervasive advancement and deployment of new technologies like different smart devices and social network across the retailing landscape have blurred not only the line between online and physical retailers, but also the boundaries between retailers and manufacturers (Reinartz et al. 2019; Piotrowicz and Cuthbertson 2014; Brynjolfsson et al. 2013). As a consequence, the omnichannel concept has evolved substituting existing multiple channels, with an aim to deliver a seamless, unified customer experience (Reinartz et al. 2019; Piotrowicz and Cuthbertson 2014). This digital transformation affects the retailing arena to a great extent, as manufacturers have entered into that interface to engage directly with the end consumer instead of the traditional retailer (Reinartz et al. 2019). This is the case for the video game industry as publishers and developers are directly connected with consumers and have their own online stores such as Origin, store and Playstation store (Polo 2019).

The video game industry is an industry that has been on the rise for the past 20 years (Johnson and Woodcock 2019; Waldner et al. 2013; Jöckel et al. 2008) with it reaching a worth of 151,9 billion dollars in 2019 growing steadily from 76,5 billion dollars in 2013 (Wijman 2019). With this steady growth the videogame industry is catching up and has even passed the in 2018 that had a global box office revenue of total 41,1 billion dollars (Statista 2019a). This trend is expected to continue with a CAGR of 9% till 2022 as consumers continue to play and newer platforms like mobile and tablets gain popularity among gamers (Wijman 2019). The video game industry has changed so much over the years with the development of new that in addition to creating better quality games has enabled new ways of (Waldner et al. 2013; Davidovici-Nora 2014). A video game itself can be described

2 as “a game played by electronically manipulating images produced by a program on a monitor or other display”, Video games are often made for platforms such as PC (), dedicated consoles like , Playstation and Switch playing on a TV and mobile phones (Wijman 2019). Video games have traditionally been sold in retail stores such as GameStop, MediaMarkt and Walmart but gradually digital retailers such as Steam, Origin, Microsoft store and Playstation store have nearly taken over the sales of video games (Polo 2019). Looking at the American market,in 2018 83% of all video games sold, were in digital form which was a dramatic change since a decade earlier 80 % of all sales were physical (CD, DVD, SD card or cartridge) (Statista 2019b). While this has been a drastic change, globally things have not advanced quite far with sales of physical console games still owning around 66 % of the market worldwide in 2017 (Wepc 2020). This number however is getting smaller each year as retailers are adapting to new ways of distribution by adopting since they cannot afford not to. GameStop in their annual 10k report with an overview of the past year mentions the trend of downloading games have increased significantly and if they do not act with great haste consumers might go elsewhere with their distinct changing behavior (GameStop SEC 10-K form 2019). With changing purchase behavior brick-and-mortar retailers such as GameStop are becoming less important with their usefulness as a middleman being questioned as they have failed to adapt to the current times (Gilbert 2020). As consumers’ everyday life becomes more digital so does their purchase behavior but it is still unclear what is behind this gradual shift as many still stick around buying physical copies of games.

1.2 Problem

Many industry experts and researchers have predicted that the role of the retailer or middlemen has shrunk enough to be questionable in the near future (Piotrowicz and Cuthbertson 2014; Reinartz et al. 2019; Rigby 2011; Otto and Chung 2000) and for survival it is obvious for any to embrace the emerging concept of digital platform (Kumar 2018; Varadarjan 2018; Reinartz et al. 2019). However, several studies on e-commerce and digital platform reveal that not all groups of customers prefer to do online purchases due to risks associated with fraudulent acts, data privacy and customer tracking activities through ‘push’ advertisements (Piotrowicz and Cuthbertson 2014; Lee et al. 2012; Zhu et al. 2017). The of collected data and a breach of privacy have become an emerging issue (Piotrowicz and Cuthbertson 2014). In that context Meyer (2018) has argued that anytime

3 consumers may decide not to have apps acting as virtual ‘shopping friend’ on their and in their homes, which will simply jeopardize the company's financial investment on new technology.

Another group of researchers pointed out that retailing industry has adopted digital technologies since 1960s in different formats (Betzing et al. 2018; Hagberg et al. 2016) and went through transformations based on specific industry requirements (Rigby 2011; Goldmanis et al. 2010; Steinfield et al. 2002). Diffusion of an online platform is linked to the decline of small establishments in certain industries, whereas it has minimal or positive impact on large establishments in other industries (Goldmanis et al. 2010). For example: the travel agency industry has gone through a shift as consumers are preferring online purchase and have reduced agency commissions. A large bookstore chain like Barnes and Noble has embraced online platforms as a business expansion strategy, whereas in the car industry, consumers are preferring physical stores as point of purchase but online platforms as source of information (Goldmanis et al. 2010). But in the last few years, the digital distribution platform has brought disruptive shifts into the video game industry (Davidovici-Nora 2014) and has challenged the existence of the physical retailer in the coming years (HBS Digital initiative 2017). The declining phase of the big brick-and-mortar video game retailer - GameStop has revealed the changing dimensions in this industry and raised questions about the position of retailers and middlemen in future (HBS Digital initiative 2017; Gilbert 2020). Different research works reveal that due to technology, the video game industry is going through radically changing distribution channels like the ; where the boundaries between consumer and developers have become more permeable than before (Payne 2018; Waldner et al. 2013; Potts et al. 2008; Jöckel et al. 2008).

Existing research works within the field of e-commerce and its impact on physical retailers have mostly been carried out on consumers’ perspective focusing on web and trust in e-commerce (Ruppel et al. 2003; Oliveira et al. 2017; Hallikainen and Laukkanen 2018) influencers and barriers in e-commerce (Alqahtani et al. 2012), consumer’s intentions (Doong et al. 2011) and decision-making process (Zhu et al. 2017), customer relationship (Lee et al. 2012) and then, conceptual framework for cyber-enhanced retailing (Otto and Chung 2000; Steinfield et al. 2002), effect of e-commerce on supply-side industry structure (Goldmanis et al. 2010) and retailing (Reinartz et al. 2019), in-store technologies (Betzing et al. 2018) and omnichannel concept in retailing (Piotrowicz and

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Cuthbertson 2014). Different scholarly works in this field have focused on the immense impact of digital platforms on existing retailing industry and consumers, but industry specific empirical study on the business model in retailing embracing technological advancement is found to be less explored. Moreover, studies within the field of the video game industry have been more focused on subjects such as consumers of physical vs digital (Lee et al. 2016), live streaming (Johnson and Woodcock 2019), local/global knowledge on (Cohendet et al. 2018), (Engelsätter and Ward 2018) and distribution strategies (Broekhuizen et al. 2013) and value creation process (Marchand and Hennig-Thurau 2013). Research articles have also been written about digital business models for developers (Davidovici-Nora 2014), technological tying and price competition (Derdenger 2014), knowledge spillover and economic effect of developers’ network (Claussen et al. 2011), consumer involvement in value chain network (Henfridsson and Holmström 2002; Jöckel et al. 2008), industry structure and competition (Williams 2002). Existing research have mostly emphasized the marketing strategy and value co-creation process in the video game industry from only developers’ perspectives. Though the video game industry has been defined as one of the fastest growing industries worldwide by the academic researchers and industry experts (Johnson and Woodcock 2019; Teipen 2008), it has received little scholarly attention from the arena of business and economics (Zackariasson and Wilson 2012) specifically in European region (Nieborg and de Kloet 2016). A few research works have highlighted the vulnerable position of the physical retailers in the industry (Payne 2018) and have considered the growing radical and the highest number of -enabled households in certain countries like the Netherlands, Norway, Sweden, Denmark, , the UK and France as catalysts in this changing business environment (Nieborg and de Kloet 2016). Researchers have further argued that the Northern European countries are in the forefront to adapt to this digital transformation in the existing business models in the industry.

With such notions, this study intends to focus on balancing between online and physical sales and explore the business model of the retailers in the Swedish video game industry considering their future business strategies. This study will also consider consumers’ viewpoints to generate a holistic view of existing practice in the industry and its future prospects. Since in a retailer’s business model value is delivered to customers and appropriated by the retailer and its partners including suppliers (Sorescu et al. 2011), it is crucial to have all actors’ viewpoints to define retailer’s position in the industry. Thus, this dyadic research encompassing both retailers and consumers will cover how changes in the physical and digital environment influence the

5 business and offer insights and directions to the retailers and middlemen who are facing the first wave of shock. The outcome of this study will contribute to the scholarly field of retailing practice in the era of digitalization and will also offer some suggestions or directions based on theoretical framework for the similar service or industry practitioners.

1.3 Purpose and delimitations

The purpose of this study is to extend the understanding of the business model of video game retailers using online and physical stores. It will focus on the impact of digital platforms on the changing landscape of retailing industry like the video game industry and its future prospects considering different actor’s perspectives such as retailers and consumers.

Individual European country specific study on the video game industry is found to be scarce to address how some Northern European countries are playing a significant role to flourish this booming industry utilizing government policy, ICT and hi-tech infrastructure (Nieborg and de Kloet 2016). In this context researchers have also named Sweden for its ongoing contribution in the international arena of the video game industry along with a profound of ICT related developments. With such understanding, this study intends to be delimited within the boundaries of the video game industry in Sweden, more specifically Swedish retailers classified as click-and-mortar organizations.

1.3.1 Research questions

How does e-commerce impact the business model of retailers in the gaming industry?

Why is the contribution from different actors in a retailer's business model crucial for both the value creation and appropriation processes?

1.4 Report structure

The structure of this paper is as follows: from here a literature review will be presented offering the reader additional necessary knowledge about the current research on business models. Next a conceptual framework will be presented explaining key concepts around the retail business model and proposing a research model with the authors’ assumptions. After this a detailed

6 method chapter explaining the ways this study has been conducted. Following this a short presentation of the case retailers which is followed by a presentation of the empirical data gathered from both retailers and customers with an analyzis of the presented assumptions. Next a discussion offers some new propositions and an adjusted model of the retail business model followed by a conclusion presenting this study's important takeaways and contributions. Finally limitations and future research is presented ending with a reference chapter and the appendix containing interview questions and scripts.

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2 Literature review

In this chapter, researchers present theories and definitions related to business model, e- business model, classification of e-business organization, elements of retail business model and video game industry to map the existing stream of literature in this research field. This review of previous research reflects further on the research gap and will help the researchers in developing conceptual framework and assumptions in the following chapters.

2.1 Business model and impact of digitalization

Business model

The introduction and proliferation of the internet and the digital economy have triggered the evolution of new business models (Gatignon et al. 2017; MacKensey and Company 2017; Zott et al. 2011; Wirtz et al. 2010; Chen 2003) and have received momentous attention in the academic and professional journals (Ruggieri et al. 2018; Baden-Fuller and Haefliger 2013). Technological advancement and customers’ increased access to digital platforms have made firms adopt new business models to create new ways for value creation and appropriation (Gatignon et al. 2017). Statistics show that over the next five years, about 80% of firms are planning to adopt new business models (Gatignon et al. 2017; Accenture 2014). Due to its immense importance, since 1995 the concept of business model has been explored by different researchers in more than 1177 peer-reviewed articles (Zott et al. 2011). But the number of articles, conferences and discussion panels on this subject of business model appear to be insufficient for the researchers and practitioners to develop and agree on a common and widely accepted definition and structure of a business model (Baden-Fuller and Mangematin 2013; Baden-Fuller and Haefliger 2013;Zott et al. 2011). As a consequence, researchers end up with a diverse set of business model definitions and classifications (Baden-Fuller and Haefliger 2013). Among all these scholarly works, a systematic literature review done by Zott et al. (2011) is found to be more accepted and recognized by many researchers (Ruggieri et al. 2018; Baden-Fuller and Haefliger 2013; Sorescu et al. 2011).

According to Zott and Amit (2010), business model refers to a system of interdependent activities articulating a firm’s value proposition, sources of revenue, its utilized resources to extract rent and the governance which basically connects firm’s different stakeholders. Based on this core idea Sorescu et al. (2011) has proposed a working definition as: ‘A business model is a well-specified system of interdependent structures, activities, and processes that serves as

8 a firm’s organizing logic for value creation (for its customers) and value appropriation (for itself and its partners)’ (p. S4). Fielt (2014) has further linked this concept to value, more specifically creation and capture of value by the organization (Ruggieri et al. 2018). In a recent study Müller et al. (2018) attempts to propose a comprehensive definition. They have argued that a business model depicts the ways how organizations conduct different activities to deliver value to the customers and how they interact with suppliers, customers, partners in their network, and finally how they get feedback from customers. In summary, in the widespread recognized literature, most of the researchers have agreed that a business model should be able to connect two dimensions of a firm activity: value creation and capture (Zott et al. 2011; Zott and Amit 2010; Casadesus-Masanell and Ricart 2010; Baden-Fuller and Haefliger 2013; Baden-Fuller and Mangematin 2013; Teece 2010).

E-business model

The very systematic study by Zott et al. (2011) suggests focussing on three distinct concepts: 1) e-business model archetypes, 2) business model as activity system and 3) business model as cost/revenue architecture to better understand the business model concept in any respective study. Since the mid-1990 the concept of business model became popular among academic scholars and professionals due to the introduction of the internet (Ruggieri et al. 2018; Zott et al. 2011). Technology advancement has brought dynamic changes in the business environment and has facilitated the evolution of new business models (Baden-Fuller and Haefliger 2013; Chen 2003). The pervasive penetration of the internet has created a ‘high velocity environment’ (Wirtz et al. 2010) with changing customer preferences, which has made modern organizations to adopt e-business models as a way of survival (Phillips and Wright 2009). Historically the of e-commerce pioneer Dell, Amazon and e-Bay has been attributed to their novel e- business models (Chen 2003). Baden-Fuller and Haefliger (2013) have argued in their study as: ‘Business models and technologies interact regularly’ (p.419). For example: both Amazon and Easy-Jet (’s low-cost airlines) have applied traditional well-known business models with development in new contexts following new technology; whereas Google has invented new digital business models (Baden-Fuller and Haefliger 2013).

Swaminathan and Tyur (2003) has defined e-business as a business process which uses the internet or electronic medium to conduct business transactions (Phillips and Wright 2009). However, researchers have further argued that e-business encompasses e-commerce and beyond by including the implementation of information technologies for internal processes as

9 well as external commercial activities and interactions with suppliers and customers (Phillips 2003; Phillips and Wright 2009). Here, Phillips and Wright (2009) have defined internal functional activities, such as marketing, accounting, human resource, and operations. During the early phases of the internet, a good number of business models have been proposed to the to find the best one for pursuing e-business (Phillips 2003; Phillips and Wright 2008). According to Chen (2003), based on classification, more than 29 e-business models have been discussed by different authors. However, following those studies Mahadevan (2000) and Weill and Vitale (2001) have considered four distinct concepts to define business models for e-business, which are: 1)the model, 2) the revenue model, 3) whether the model aims B2B or B2C market and 4) whether the firm is pure-play (online) or click-and- mortar.

2.1.1 Classification of e-business organizations

Different reasons and perceived benefits like better information management, better integration of channel and actors, lower transaction costs, better understanding of market and geographical penetration have motivated many organizations to adopt e-business (Damanpour, 2001; Dubelaar et al. 2005). Considering the immense growth of e-commerce Turban et al. (2009) have classified business organizations into three groups such as brick-and-mortar organization or purely physical companies, click-and-mortar organizations and virtual companies.

1. Brick-and-mortar companies It refers to completely physical companies (Turban et al. 2009; Doong et al. 2010). Brick-and- mortar model of retailing is based on a physical store with a display of the merchandise; where the customers can interact with vendors directly, physically try the products and then can take them home immediately (Enders and Jelassi 2000). Customers can easily return or exchange products in the store (Enders and Jelassi 2000). Moreover, it allows them to ‘touch, feel and try’ the and have face-to-face conversations with sales personnels (Adelaar et al. 2003; Enders and Jelassi 2000). Enders and Jelassi (2000) have argued that this type of business involves substantial investment in creating physical infrastructure to enter a geographically new market and offers limited working hours and day. Due to the diffusion of digital technology, this model of retailing is becoming obsolete in many industries or countries (Piotrowicz and Cuthbertson 2014; Reinartz et al. 2019; Enders and Jelassi 2000).

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2. Click-and-mortar companies In this category, companies utilize e-commerce activities as marketing channels along with the physical store (Turban et al. 2009; Doong et al. 2010). Adopting the click-and-mortar model, companies can derive synergies from the integration of e-commerce in their physical retail outlets (Adelaar et al. 2003). According to Adelaar et al. (2003), this type of companies enjoy certain benefits over traditional brick-and-mortar companies such as strong relationship with existing customers in the geographical market, relocation and re-establishing contact with the moved away customers and bringing in new customers via easier and less expensive purchase options.

3. Online companies This type of companies use e-commerce solely to conduct their business (Turban et al. 2009; Doong et al. 2010). This model of retailing gives the customer access to the online platform to have product information, place an order, pay and in case of digital products like , music, video and so on customers get them delivered immediately via the internet (Enders and Jelassi 2000) instantaneously through the Internet. Enders and Jelassi (2000) have further argued that, due to the nature of online retailing, it enjoys a number of advantages over the traditional brick-and-mortar retailers such as wide reach, exhaustive product selections, little infrastructure requirements, unlimited opening hours and a high degree of scalability.

______Note: Researchers have used terms like organizations and companies interchangeably (Turban et al. 2009; Doong et al. 2010). Moreover, in some articles different terms like ‘pure-play’, ‘virtual’, ‘web-based’ have been used to define online companies (Chen 2003; Doong et al. 2010; Reinartz et al. 2019)

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A good number of scholarly works have focused on the burgeoning issues of digital impact on physical stores, characteristics of brick-and-mortar, click-and-mortar and online companies and their business models from different perspectives. Since the literature in this field is quite young and dispersed across different disciplines, authors intend to systematically summarize the most relevant studies to map the ongoing development and to create a theoretical base for this study. In this regard, the Web of Science platform has been utilized to review some peer reviewed articles in this field. Authors have preferred to reflect on the most important findings in this research field by summarizing key concepts of following ten most relevant articles (see Table 1) out of twenty four reviewed articles to understand the overall empirical findings in this study.

Topic Method Author Findings Context

The impact of digital Research paper Reinartz et al. From a value-creation Digitalization and transformation on the 2019 perspective, digitalization new sources of retailing value chain impacts the existence of value creation brick-and-mortar retailers. The digital transformation effects retailing through five new sources of value creation: , individualization, ambient embeddedness, interaction, transparency & control.

In-store Technologies in Literature Betzing et al. In-store technologies in In-store the Retail Servicescape review 2018 brick-and-mortar retailers technologies in leverage customer brick-and-mortar experience and impact retailers business strategies.

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Topic Method Author Findings Context

Introduction to the Special Focus group Piotrowicz and Key issues are: channel Channel integration Issue Information discussion Cuthbertson integration, the via omnichannel Technology in Retail: 2014 impact of mobile strategy Toward Omnichannel technologies & social Retailing media, the changing role of brick-and-mortar stores, diverse customer requirements,personalizati on & privacy and supply chain redesign. The omnichannel approach leads to seamless customer experience.

Business Model A single case Cao 2014 As a consequence of e- Value creation via Transformation in Moving study following commerce, a retailer can cross-channel to a Cross-Channel Retail multiple data shift towards cross- retailing Strategy: A Case Study collection channel strategy following methods: semi- five stages (solo, minimal, structured moderate, full integration, interviews, new business model) of observations, adoption model rather and document than operating in separate analyzis channels. The physical store works as a hub linking different channels to create value.

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Topic Method Author Findings Context

Enhancing customer value Multiple case Adelaar et al. Highly integrated click- Customer value through click-and-mortar studies 2003 and-mortar e-commerce enhancement e-commerce:implications strengthen relations with through click-and- for geographical market existing customers in mortar e-commerce reach and customer type geographical markets, relocate and re-establish contact with moved away customers and bring in new customers.

Understanding Click and Research paper Steinfield 2002 A conceptual framework Channel integration Mortar E-Commerce describing four synergy- in click-and-mortar Approaches related benefits from tight retail business integration between online channel and physical store; and minimization of channel conflicts.

The Converging Business Research paper Enders and It focuses on advantages Convergence of Models of Internet and Jelassi 2000 and disadvantages of bricks-and-mortar Bricks-and-Mortar physical and online and online retailers Retailers stores. The convergence of bricks-and-mortar and online retailers minimize drawbacks in both types of retailers.

OptimizingYour Digital Multiple case Weill and A successful digital Effective digital Business Model studies Woerner 2013 business model should business model to What does it take to create consist of three create customer the strongest possible components: good value proposition online presence? content, customer

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Topic Method Author Findings Context

experience and platforms to create customer value propositions. But a company does not need to lead in all three areas.

Value creation in e- Multiple case Amit and Zott A model of sources of the Value creation in e- business studies 2001 value creation in e- business: business suggests four firm/manufacturer’s dimensions: efficiency, perspective complementaries, lock-in, novelty. An integration of entrepreneurship & strategic management theory can fully explain this value creation process.

Benefits, impediments and Multiple case Dubelaar et al. Identified major Bricks-and-mortar critical success factors in studies 2005 impediments in the vs online B2C adoption of e-business companies: success E-business adoption are: leadership issues, factors & obstacles operational issues, in e-business technology, adoption and ineffective solution design. The critical success factors are: e- business knowledge, value proposition & delivery measurement, customer satisfaction & retention, monitoring

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Topic Method Author Findings Context

internal processes & competitor activity, and finally trust.

An investigation of Quantitative Doong et al. Consumers’ offline brand Consumer’s consumers’ webstore study 2010 loyalty plays a significant purchase behavior shopping: A view of role in decision-making on click-and-mortar click-and-mortar company process across both online company and offline channels and impacts their purchase intention on the same brand’s online store.

Table 1: Summary of relevant articles

From the above mentioned summary in Table 1, it is visible that most of the research works have been evolved within four contexts: characteristics of brick-and-mortar, click-and-mortar and online businesses(Adelaar et al. 2003; Enders and Jelassi 2000; Dubelaar et al. 2005; Doong et al. 2010); impact of digitalization on each type of retailing business model (Weill and Woerner 2013; Betzing et al. 2018; Reinartz et al. 2019); value creation in e-business from both manufacturer and retailer’s perspectives (Amit and Zott 2001; Cao 2014; Reinartz et al. 2019) ; and enhanced value creation through channel integration (Steinfield 2002; Piotrowicz and Cuthbertson 2014; Cao 2014).

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2.2 Retail business model (RBM)

According to Reinartz et al. (2019) retailing can be defined as: ‘Retailing as a function is central to all economies: it the varied needs of consumers with specialized offerings of producers. At heart, these retailing functions comprise the building of assortments, physical logistics of merchandise, legal transactions with the consumer, information provision and communication in general, and the rendering of ancillary services’ (p. 350).

Globally, the retail landscape is encountering revolutionary changes due to the boom of the internet era (Sorescu et al. 2011). Though the above mentioned definition aims at the mainstay physical retailing (Reinartz et al. 2019), technological advancement has brought changes in it by adopting new business models (Gatignon et al. 2017). Most retailers nowadays operate as multichannel firms where the customer can reach the retailers through different channels such as offline, online and telephone. Over the years retailers have started to shift their focus from simply selling products towards creating a rewarding customer experience (Sorescu et al. 2011). Different researchers have proposed a set of diverse business models focusing on specific sectors of the economy such as Wieland et al. (2017) on services, Zott and Amit (2010) on manufacturer, or on specific types of business models by Kind et al. (2009); Pauwels and Weiss (2008) and so on (Gatignon et al. 2017). But on retailing the business model by Sorescu et al. (2011) is found to be one and the most acceptable since it combines value creation and appropriation as a prerequisite to understand a business model (Gatignon et al. 2017; Cao 2014; Sorescu et al. 2011).

Sorescu et al. (2011) specifies how the RBM (retailing business model) is made up of three main components which they name retailing format, activities and governance. These have been used later on in the model presented in the conceptual framework chapter with further explanations. Format refers to the different formats a retailer can use to interact with its customers with structured activities on formats such as online or physical stores. Activities refers to the different activities such as pricing strategy, store design and product assortment. Governance refers to the different actors including customers involved in creating value for customers as well as incentives mechanisms. Along with these three elements, the authors Sorescu et al. (2011) also put forward 6 design themes with its own approach to enhancing value creation and appropriation through innovation. The first three themes revolve around value creation and are customer efficiency, customer effectiveness and customer engagement. For value appropriation they name operational efficiency, operational effectiveness and

17 customer lock-in. They stress the fact that an isolated change to either of these does not constitute as an innovation to the RBM unless it affects other parts of the business model as well Sorescu et al. (2011). The following parts focus on the design themes and concepts put forward by Sorescu et al. (2011).

Design themes:

Operational efficiency refers to doing things right such as cheaper, faster and easier to make the best use of the resources the retailer has available. For retailers this could mean managing inventory levels to optimize turnaround and enhance the store environment to increase sales (Sorescu et al. 2011).

Moving on to operational effectiveness which essentially comes down to doing the right things such as producing the desired results by doing things that reach those goals to the fullest (Sorescu et al. 2011). Examples here include matching the product assortment with demand and having a flexible pricing strategy.

Customer lock-in is based on the retailer’s desire to decrease the customers intention of looking elsewhere or switching to a competitor after they have done some form of initial investment (Sorescu et al. 2011). This strategy has often meant using incentives to get customers to return.

Customer efficiency is all about making the customers access to the products as simple as they can which could involve having multiple locations or ways for customers to get access to products (Sorescu et al. 2011). All of this increases customer convenience which the internet has helped greatly to achieve as customers now can order online or even order online to pick it up at the store.

Customer effectiveness refers to the retailers ability to realize the customers intention of purchasing by helping them find what they are looking for (Sorescu et al. 2011). An example of this is having a wide range of products to increase the possibility that a customer’s needs will be met, a tactic that could be at the cost of efficiency such as keeping cost down.

Customer engagement: This involves the degree to which a retailer can involve customers by designing the customer experience so as to create engagement beyond the purchase (Van Doorn et al. 2010). Retailers want to create engaged customers with a good perception of the brand that they can share with others and identify with the retailer.

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2.3 Video game industry

The video game industry is a sector involved in developing and selling video games and employs thousands of people around the world providing entertainment for billions of people (Beattle 2020). Video games have come a long way since the early days of pixelated screens to today's groundbreaking and realistic graphics (Johnson and Woodcock 2019; Beattle 2020). The cost of development has skyrocketed with the increasing complexity of games and demands from consumers and can now cost wise be compared with Hollywood blockbusters (Beattle 2020, Nieborg and de Kloet 2016). As games are becoming more popular the demographic is expanding with a nearly even gender mix and people from all walks of life coming to play (Beattle 2020; Teipen 2008). Starting as a small cottage industry of hobbyists, hackers and digital tinkerers over the past decades, the industry has always been about innovation, technology, platforms and new experiences (Nieborg and de Kloet 2016; Beattle 2020). The industry has in the past 10-20 years passed many other entertainment industries in terms of immersion (Beattle 2020). As people have moved towards spending more time on their smartphones, new streaming services like PlayStation Network and Xbox Live, and expansive marketplaces like Steam and Good Old Games teeming with independent titles and remastered classics (Payne 2018) and the growing mobile games market have become more important ways of generating revenue (Beattle 2020).

Since 2014 when for the first time sales of digital games eclipsed that of physical ones, the industry has been going through a transformation in terms of distribution of products (Payne 2018). There are not many other industries with such rapid changes both in terms of technology and products offered (Morris 2018). Though games played on personal (PC) have pioneered new ways of distributions, during the last few decades rapid expansion of broadband internet, emergence of networked game consoles and multiplayer online worlds have scaled up online distribution of games (Toivonen and Sotamaa 2010). New consoles reach the stores every 7-8 years but new ways to play are constantly evolving with everything from VR () to mobile devices and new player interfaces (Morris 2018). Retailers are struggling to keep up with the changes and what used to be an industry dominated by physical sales is now full of other more convenient ways to distribute games (Waldner et al. 2013). The brick-and- mortar model retailers are challenged not only by the online distributors but also by their increasing revenue via service subscriptions, game expansion, downloadable add-ons, micro- transactions and advertising-based strategies (Toivonen and Sotamaa 2010). In this day and age even publishers are becoming threats to physical stores as they are opening their own online

19 stores (Morris 2018). The industry is changing and retailers are changing with it, adopting new ways to engage customers and create incentives to come into the stores. With new distribution platforms like Steam and GOG, physical PC games became a thing of the past and consoles appeared to lag behind in terms of efficiently delivering games ( 2018; Pullen 2015). With the newer generation of consoles to keep up they started offering similar digital solutions but still providing incentives to buy physical copies as other actors in the industry have questioned their existence (Toivonen and Sotamaa 2010; Davidovici-Nora 2014). Still consoles are lagging behind in terms of logistics and the way they distribute as retailers like Steam and Origin provide more of an instant gratification (Banks 2018). The question of when consumers will go fully digital has been raised many times and with new services entering the market like Google with their video game streaming service Stadia and Playstation now that might be closer than they think (Morris 2018). When compared to similar entertainment industries such as the music and movie industry going more digital the games industry is very suitable for the same transformation, since they are in digital form from the beginning online distribution seems to be the obvious choice (Toivonen and Sotamaa 2010).

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3. Conceptual framework

The chapter includes the proposed research model based on the key concepts and three assumptions to be analyzed further. This proposed research model based on the concept of retail business model depicts relationships among three elements: retailing format, retailing activities and retailing governance in terms of value creation and value appropriation.

3.1 Key concepts

Core elements of Retailing business model

Retailing format: The core element of format refers to the structuring of activities in a coherent way to create a customer experience which is made possible with a combination of elements from the retailing mix. These levels include product assortment, pricing, location customer interface to name a few (Levy and Weitz 2008). The customer interface has been the focus of many retailers which deals with the exchange process. Retailers have to decide where to put their store, figure out in which location they can reach the right customers and which format to use whether it be a physical store or an online shop to maximize the reach (Sorescu et al. 2011. With this they also have to organize in terms of assortment and style as they are coordinating their online storefronts with their physical to create a coherent experience, such as a click and mortar store (Sorescu et al. 2011). In today’s market customers have many different formats to choose from and it is important for retailers to keep up with competitors as customers choose the formats that best fit their own needs. To deliver a competitive customer experience activities connections within the format needs to be specified to make a clear business model (Zhang 2009).

Retailing activities: Sorescu et al. (2011) describes it as “Refer to acquiring, stocking, displaying and exchanging goods and services that fulfill the customer experience.”(p. 7). How these activities are structured depends on the chosen format and could be activities like store design, product mix, pricing, branding and communication. When it comes to the gaming industry having an extensive product mix and assortment is crucial to attract customers (Banks 2018). Having a good pricing strategy is of utmost importance as customers interested in games often do research into the cheapest offers available (Morris 2018). Having an aggressive sales strategy with customized offers based on customer data communicated to customers could help out retailers significantly. Design comes into play when trying to attract customers is an

21 important retail activity for both online and in physical stores (Banks 2018). Adoption of new technology is something that also comes into play here and can be combined with activities that enhance customer engagement and its brand identification (Borghini et al. 2009).

Retailing governance: Sorescu et al. (2011) describes it as “Refers to the actors involved in creating and delivering customer experiences, as well as the mechanisms (such as contract and incentive systems) that motivate these actors to carry out their roles in fulfilling the customer experience.”(p.7). Actors here also include customers and the retailer’s network of actors through its supply chain where for example customer reviews has helped shape customer interface. Suppliers also have a part to play as they too can react to customers changing needs and modify their assortment to better fulfill the customer experience (Coughlan and Soberman 2005).

Value creation: Value creation simply put is the value created for customers, it is the way a company acts and the activities it undertakes to create value for its customers (Sorescu et al. 2011). According to the researchers, creating value for customers can be done in many different ways such as having sales effectively giving them more value for their money spent, being able to order online creates value for customers thinking ordering is more convenient or are unable to get to a store. The list of creative activities and format options is endless with customers also being part of this creation process by for example leaving reviews for other customers that rely on these to make purchase decisions (Sorescu et al. 2011).

Value appropriation: Much like value creation is for the customers value appropriation is for the retailers and its partners (Sorescu et al. 2011). The researchers have stated that value can be created in many different ways such as supply chain maximization as well as setting up a collecting important customer information to be used to have tailor made sales strategies.

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3.2 Proposed research model

Based on the literature review and the theoretical key concepts, authors have developed the following research model (see Figure 1), inspired by Sorescu et al. (2011)’s proposed retail business model. Here, actors have been defined within the context of the video game industry.

Figure 1: Research model: Adapted from “Innovations in retail business models” by Sorescu et al. (2011)

3.3 Assumptions

After having gone through relevant articles and created a proposed model (Figure 1) authors present the following assumptions to be tested:

A1: Adopting new technology in retailing format and activities, retailers can ensure enhanced customer value and engagement.

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A2: Different actors’ contribution in a retailer’s governance mechanism due to technological development can create enhanced value for customers, which in turn can help the retailer to maximize value appropriation.

A3: A change in existing one or more elements in the retailing business model (i.e. retailing format, activities and governance) lead to change in other elements resulting in a retail model innovation and generate new options for value creation and appropriation.

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4. Method

In this chapter, the whole research process has been documented including different aspects of methodological steps such as research approach, design, strategy, data collection method & instruments, sampling strategy along with data analyzis method. Moreover, it has been enhanced with reflecting on ethical aspects and quality criteria of this study.

4.1 Research approach

According to Bryman and Bell (2015), there are two research approaches to connect theory with empirical finding in a research, which are inductive reasoning and deductive reasoning. In inductive approach known as ‘bottom up’ approach (Bryman and Bell 2015), researchers begin with identifying patterns in collected data and move forward to build their theory or conceptual framework, whereas the opposite is the deductive approach starting with theory before collection or analyzis of data (Hair et al. 2011; Bryman and Bell 2015). Since in this study authors intend to find answer of the research questions based on a conceptual framework rooted to ‘the retailing business model’ by Sorescu et al. (2011), deductive approach is found to be appropriate for its nature of ‘theory testing’ process rather than building theory from collected data (Carson et al. 2001; Hair et al. 2011).

To employ deductive reasoning in a research project two research approaches such as qualitative and quantitative approaches can be followed (Hair et al. 2011; Bryman and Bell 2015). Qualitative research is considered to be the most appropriate one in a situation, when the topic of interest or a research problem is less known and the research question is incompletely explained by the previous research (Hair et al. 2011). In this study, existing research only highlights the eroding position of physical retailers in the video game industry (Payne 2018), but does not give clear understanding on retailer’s business models due to digital transformation of the industry (Baden-Fuller and Mangematin 2013). Therefore, a qualitative research approach is in line with the purpose of study and the most suitable approach.

4.2 Research design

According to Hair et al. (2011) researchers can employ many research to study business problems among which three designs are prominent: exploratory, descriptive and causal design. Bryman and Bell (2015) have argued that research design is crucial for research, as it impacts the outcome of the study. It defines the outline of the study aiming at the purpose of the study

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(Saunders et al. 2009). Exploratory research is employed when the researcher has little knowledge about the problem or opportunity and intends to identify new relationships, patterns, themes, ideas and so on (Hair et al. 2011). Hair et al. (2011) have further argued that this research design is highly preferred by the practitioners in technology intensive innovative industries aiming to identify technologies to meet both business and customer needs. With such understanding authors have preferred to use exploratory research design, as this study is carried out in a technology intensive industry addressing a less explored field of research.

4.3 Research strategy

According to Saunders et al. (2009), the choice of research strategy depends on the research questions and objectives, the depth of existing knowledge, the span of time and other available resources. In this context, considering these conditions researchers have decided to follow a multiple-case study research design for this exploratory study. Several researchers (Bonoma 1985; Eisenhardt 1989; Morgan and Smircich 1980; Yin 2014) have suggested the use of the case study method in the studies underpinning an exploratory or descriptive nature. Moreover, this research method has allowed researchers to investigate a contemporary phenomenon or a set of events in depth within the context of a real-world case (Yin and Davis 2007), following a ‘how’ or ‘why’ research question (Yin 2014).

The core motivating factors behind adopting this research strategy are: (i) the exploratory nature of the study and (ii) the fact that the impact of e-commerce on retailer’s business model is a contemporary phenomenon rather than historical. According to Yin (2014) researchers have almost no control over this phenomenon. Since this study intends to have in-depth understanding of retailers’ (Doong et al. 2010) business models following other actors’ influence in the gaming industry, the choice of a multiple-case design has found to be well- justified. Moreover, authors have focused on the individual cases of retailers along with their unique contexts to generate findings, which have met the basic rule of thumb for a multiple- case study design (Bryman et al. 2019). Though a multiple-case study is time consuming and complex in nature, it allows researchers to identify differences or similarities within and between cases based on theory (Yin 2014; Eisenhardt 1991; Bryman et al. 2019).

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4.4 Data collection method

As an initial step of exploratory research, a literature review has been conducted (Hair et al. 2011), utilizing peer-reviewed articles, industry reports, company website and other articles from reliable sources. This has worked as a base to design data collection methods and implement qualitative techniques while collecting primary data. This multiple-case study has been conducted on two click-and-mortar retailers in the video game industry. Furthermore, data has also been collected from customers, another important actor in the video game industry, as they are actively contributing in transforming or innovating retailer’s business model (Sorescru et al. 2011). For this purpose, fourteen video game players or customers have been reached following specific data collection instruments. Authors have also gathered secondary data from different reliable sources like company , industry review reports, articles and so on to enhance the quality of the data analyzis process (Bryman and Bell 2015).

In qualitative research, basically two broad approaches such as observation and interviews are employed to collect qualitative data (Hair et al. 2011). In order to ensure cross-case comparability along with a standardized approach in a multiple-case study, researchers have agreed to use a qualitative interview technique (Bryman et al. 1996; Bryman et al. 2019). It reflects more on the interviewee’s own perspective rather than the researcher’s concerns as in quantitative research (Bryman et al. 2019) and gives researchers greater opportunity to increase participation rates by explaining the importance of the projects and their valuable contribution in it (Hair et al. 2019). Interviews can differ from being highly structured one to highly unstructured one using a variety of forms such as face-to-face, or via telephone, and Skype (Hair et al. 2019; Bryman et al. 2019). In this study, for each case of retailer, authors have conducted online personal interviews (Bryman et al. 2019) to collect primary data. Due to the locations of retailers in different cities (e.g. Stockholm, Gothenburg, Karlstad and so on) as well as the outbreak of Coronavirus pandemic, online personal interviews via emails have been preferred over face-to-face interviews. In this process for greater commitment and motivation, authors have exchanged several messages with the respondents for instance CEO and Product Managers of the respective retailer, as suggested by Bryman et al. (2019) to reassure the significance of their valuable contribution. As a consequence, it has built a ‘relationship of mutual trust’ (Mann and Stewart 2000, cited by Bryman et al. 2019) with the managers; which let authors to go back to them for further information and clarification. Moreover, respondents have had enough time to ponder upon all those supplied questions and

27 given more detailed answers in comparison to a face-to-face interview as argued by Bryman et al. (2019). Finally, semi-structured face-to-face interviews have been conducted to collect data from the consumers, that is the video-game players. This technique allows researchers to explore respondent’s perceptions and motives about less explored research topics and gives an opportunity for the researchers to clarify their answers further (Barriball and While 1994). Following this technique, authors could delve deeply into a response to figure out all possible motives behind any particular consumer behavior (Hair et al. 2019). But in response to the unavoidable situation of during the Coronavirus pandemic, a few interviews have been conducted via Discord and Skype. In agreement with Bryman et al. (2019) authors have found it more time and cost savings and flexible than the face-to-face interview to some extent. In this regard, interviews were audio recorded and transcribed. The average timespan of each interview was approximately 25-30 minutes.

4.5 Data collection instruments

4.5.1 Structured interview schedule & interview guide

To meet the purpose of this study, authors have utilized both open-ended questions and an interview guide to conduct online personal interviews and semi-structured face-to-face interviews respectively. While conducting online personal interviews with the retailers, a structured interview schedule with a set of predetermined open-ended questions (Hair et al. 2011) have been used for each interview. The conceptual framework has worked as root to design this interview schedule. According to Hair et al. (2011), it has helped authors to avoid any inconsistency during interviews, as they have offered equal opportunity to each respondent to respond. For face-to-face interviews, an interview guide consisting of a list of addressable questions has been used; which is less specific than a structured interview schedule (Bryman et al. 2019). This interview guide has been developed with an aim to ask relevant questions considering the theoretical aspects and to stay on the right track, (Bryman et al. 2019; Hair et al. 2011) based on the conceptual framework on ‘retail business model’. Semi-structured nature of the face-to-face interview creates such a flexible atmosphere that authors could pursue open conversation with the video-game players to gain in-depth understanding on the phenomenon (Bryman and Bell 2015; Saunders et al. 2009). While conducting semi-structured interviews, the first interview has been carried out as a pretest to revise the interview schedule.

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4.5.2 Operationalization

Authors have drafted the following operationalization table (see Table 2) based on the research question and the conceptual framework. It has worked as a core guideline while pursuing this research.

Literatures Conceptual Practical themes Questions: Questions: Retailers Consumers (See Appendix 1) (See Appendix 1)

Retailing It refers to the organization of ● Dilemma of deciding Q:1 Q:4 format selected retailing activities aiming to where to sell the video Q:2 Q:6a (VC) fulfil customer experience (Sorescu games (for example Q:4b Q:9 et al. 2011). It depicts a combination click and mortar or Q:6 of retailing mix like product ) assortment, pricing strategy, ● Level of convenience location, customer interface, and so offered to customers forth (Levy and Weitz 2008). (location, interface, product mix and pricing)

Retailing It deals with acquiring, stocking, ● Adapting and Q:1 Q:5 activities displaying and exchanging goods promoting new Q:3 Q:6a (VC) and services to deliver customer technologies to satisfy Q:6 experience following the adopted customer needs (Sorescu et al. 2011). It (communication focuses on designing retailing strategy and supply activities within a specific retail chain optimization). format to enhance customer ● Enhanced customer engagement (Borghini et al. 2009). engagement through virtual/physical store design and atmosphere.

Retailing It refers to all actors involved in ● Developers’ chain of Q:4a Q:6b

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Literatures Conceptual Practical themes Questions: Questions: Retailers Consumers (See Appendix 1) (See Appendix 1) governanc creating actors responsible for Q:5 Q:7 e and delivering customer creating the customer Q:7 Q:8 (VC & experiences, as well as the experience (e.g. Q.8 VA) mechanisms like incentive system or incentives and Q:9 other they use to perform their roles contracts with retailer) (Sorescu et al. 2011). Actors include ● Customer reviews retailer, customers and retailers’ impact the design of network of partners in the supply retailer interface and chain. Suppliers can help in assortments. reshaping retailers’ supply chain ● Retailer’s value following customer needs appropriation via (Coughlan and Soberman 2005). cooperation of Customers are also co-producers in developers & many retailing environments customers (Sorescu et al. 2011).

Table 2: Operationalization: Adapted from “Innovations in retail business models” by Sorescu et al. (2011) * VC stands for value creation and VA stands for value appropriation.

4.6 Selection of cases and respondents

Researchers have followed convenience sampling technique to select cases of retailers, as it allows easy and convenient access to the target group within a limited timeframe (Easterby- Smith et al. 2015). In this regard, ten retailers with a combination of four online and six click- and-mortar retailers have been reached and five retailers have expressed their interests to participate in this study. But as a consequence of COVID-19 pandemic crisis situation, shortly three retailers have refused to participate and only two retailers have contributed to this study.

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Authors have selected retailers operating in Sweden, based on the information available in the Swedish games industry report (Dataspelsbranschen 2019) and the Prisjakt (Prisjakt.se) website selling video games. Several research work reveals that the highest number of internet- enabled households and ICT related R&D investment have unleashed enduring potentials of the video game industry in the Northern European countries (Beinisch et al. 2005; Nieborg and de Kloet 2016). More specifically, Sweden is found to be in the frontrunner position in leading local game development (Nieborg and de Kloet 2016), which has motivated authors to pursue this study on Swedish retailers. Since retailers have preferred to be anonymous, authors have named them as Retailer Blue for case 1 and Retailer Green for case 2. Some quick facts about retailers are presented in Table 3:

Retailer No. of employees Founded Products in store Interviewees

Blue Ca 100 2000 Physical video games Product Manager and digital codes, accessories, consoles and game related devices

Green Ca 50-100 1994 Physical video games, CEO & Product figurines accessories, Manager consoles and game related devices

Table 3: Quick facts on retailers

Purposive sampling technique has been employed while selecting the target group of customers to conduct semi-structured interviews. Purposive sampling, a form of non-probability sampling technique let researchers seek to sample participants relevant to the research questions following their own judgment and experience (Bryman et al. 2019; Hair et al. 2011). In this study, authors have prioritized reaching a group of customers or video game players in Sweden, who play video games on different platforms regularly (almost each week); and have adequate and latest knowledge about the video game industry to give insightful feedback. Thus,

31 purposive sampling technique is well justified for this study. Sixteen video game players have been interviewed among which two interviews have been discarded due to irrelevant and incomplete information. Therefore, authors have considered feedback from fourteen interviewees, who are all anonymous considering the ethical perspective of this study. After conducting the 12th interview, since authors could see a pattern and repetition in feedback, they have decided to stop interviewing after 14th to avoid data redundancy. Respondents are both male and female with almost the same ethnic background that is Swedish, within the age group of 19-45.

4.7 Data analyzis method

According to Flick (2014) qualitative research has different aims such as exploring a thematic range and company social group’s knowledge in a particular research topic or finding a core category and theory development as done by a grounded theory analyst. The aim of the research as well as the nature of the collected data has great impact on the choice of data analyzis method (Flick 2014; Saunders et al. 2009). Moreover, qualitative analyzis procedures depend upon whether the researcher has employed inductive research approach or deductive research approach (Saunders et al. 2009; Flick 2014). Since this study rooted to deductive reasoning aims to focus on individual respondents’ perceptions on that research topic while analyzing multiple cases, authors have preferred to employ the thematic analyzis method (Flick 2014). It has led researchers in identifying some patterned response or meaning across the data set relevant for the research question. Moreover, the flexible nature of the thematic analyzis approach has allowed authors to categorize the empirical data and summarize those under some core themes to understand the phenomenon (Bryman and Bell 2015). According to Braun and Clarke (2006), thematic analyzis method can be defined as:

Thematic analyzis is a method for identifying, analyzing, and reporting patterns (themes) within data. It minimally organizes and describes your data set in (rich) detail. However, it also often goes further than this, and interprets various aspects of the research topic (p.79).

During data analyzis authors have carried out following six steps as suggested by Braun and Clarke (2006): (1) Familiarization with the data set by reading transcripts (2) Generating initial codes considering both verbally expressed and underlying meanings

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(3) Sorting codes into themes (4) Reviewing themes: generating subthemes/cluster themes and discarding less relevant themes (5) Defining core themes (6) Producing the report

The authors have employed a coding process manually to identify and interpret some patterns and themes from the empirical data to develop ideas (Bryman and Bell 2015; Hair et al. 2011). During the coding process, three theme nodes such as Retailing format, Retailing activities and Retailing governance have been generated considering the research focus and the data set. Each node has been further classified based on the concept of Value creation and Value appropriation derived from the research model to explore connections between themes and to discover patterns as well as to develop ideas.

4.8 Ethical considerations

Since the boundaries between ethical and unethical practices are not always distinct, researchers usually take different measures in this regard (Bryman et al. 2019). Northway (2002) has outlined researcher’s confrontation with ethical issues at every step of the research from selecting the topic to identifying a sample, conducting the research and presenting the findings. In this context Bryman et al. (2019) have suggested business researchers to follow four main ethical principles, which are: 1) avoidance of harm to participants, 2) obtaining informed consent, 3) protection of privacy through confidentiality and 4) preventing deception. In this study authors have strictly followed all these four areas of ethical principles while conducting interviews specifically recording and transcribing the conversation and analyzing the data. Moreover, authors have preferred to focus on the concept of ‘reciprocity and trust’ (Bell and Bryman 2007) comprising two key principles of informed consent and avoiding deception. From the very beginning, through open and honest communications this research project has achieved the goal of a mutually beneficial exchange between the respondents and the researchers reflecting on the concept of reciprocity. Respondents were clearly briefed about the importance and benefits of this study and their roles in it. Furthermore, authors have always prioritized ‘trust’ while employing a purposive sampling technique to avoid any sort of ambiguity or deception.

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4.9 Quality criteria

The quality criteria of qualitative research is assessed differently than that of quantitative research calculating numerical index as a validity index for a particular study (Bryman and Bell 2015; Hair et al. 2011). Since in qualitative research, researchers work with texts and images, they simply cannot calculate a validity index (Hair et al. 2011). But there are several ways for qualitative research to assess trustworthiness and authenticity of the study (Bryman and Bell 2015; Hair et al. 2011; Lincoln and Guba 1985). Since many researchers have argued authenticity criteria as less influential and controversial, four criteria of trustworthiness such as credibility, transferability, dependability and confirmability have been focused to ensure quality of this study (Bryman and Bell 2015).

Credibility: According to Hair et al. (2011), the most important concept in establishing credibility in qualitative research is triangulation following any of the four types: Researcher triangulation, Data triangulation, Method triangulation and Theory triangulation. In this study, data triangulation has been used by collecting data from different sources such as primary data from both retailers and customers, and secondary data from published articles and industry reports to have a clear picture of the whole phenomenon. Moreover, after completing fourteen semi-structured interviews, authors could find some patterns among the respondents and this recurring pattern signal the higher quality of the data as well as credibility of the study (Bryman and Bell 2015).

Dependability: As parallel to reliability (Bryman and Bell 2015), dependability of this study has been ensured by recording all semi-structured interviews and transcribing those along with field notes on google document for clear understanding between researchers. The scripts from online personal interviews and communications with the retailers have also been preserved in original format. According to Hair et al. (2011), in qualitative research, reliability more specifically inter-rater reliability depends on different researchers’ degree of consistency in using similar words, phrases or other kinds of data to the same pattern or theme. In that context, both authors have worked together to ensure consistency in the coding process, to agree upon categories for themes and to generate core themes from data.

Transferability: Though according to LeCompte and Goetz (1982) it is difficult to replicate a qualitative research due to dynamic social circumstances, following transferability criteria the study can be transferred into another context for further research (Bryman and Bell 2015; Graneheim and Lundman 2004). In this study, authors have utilized an operationalization table,

34 a structured interview schedule for online personal interview and an interview guide for semi- structured interviews to meet the goal of transferability criteria. Moreover, the whole research procedure has been well documented to make this study easy to follow and transferable for future researchers.

Confirmability: According to Bryman and Bell (2015), confirmability can be met by being objective within the research. To achieve confirmability of this study, both authors have worked in ‘good faith’ (Brayman and Bell 2015) while collecting empirical data and strictly avoid any kind of personal influence on respondents’ feedback.

4.10 Methodology Summary

All methodological steps followed in this study have been summarized in Table 4.

Methodological steps Application in the study

Research approach Deductive approach Qualitative approach

Research design Exploratory research

Research strategy Multiple-case study

Data source Primary & Secondary data

Data collection method (Primary data) Online personal interviews Semi-structured interviews

Data collection instruments Structured interview schedule & Interview guide Operationalization

Selection of cases & respondents Cases of retailers: convenience sample Customers: purposive sample

Data analyzis method Thematic analyzis

Quality criteria Credibility, transferability, dependability and confirmability

Table 4: Methodology summary

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5. Information on retailer cases

This chapter presents secondary data on two cases of retailers, which are anonymously named as Retailer Blue and Retailer Green. This data will be further utilized in the data analyzis chapter along with empirical findings. Since both companies have preferred to be anonymous, authors have deliberately not included any reference sources.

5.1 Retailer Blue

Retailer Blue is a retailer that has been around since the year 2000 with their first store in Göteborg. After 3 years in business they opened up their online store to get access to more customers and quickly expanded with new stores opening and today retailer Blue has stores in cities such as Stockholm, Malmö and Göteborg. Over the years their online store has been awarded with a total of 18 awards from places like Prisjakt and Pricerunner with the company receiving awards for their physical stores as well. In 2019 they received 9 rewards from Better business who facilitate undercover customers to assess the service in stores and found Blue to have outstanding service.

Retailer Blue is selling video games from a large variety of different publishers for all the major consoles on the market. When it comes to games Blue is selling physical copies both instore and online and offers free delivery, free returns and if customers order before 17:00 the orders are sent out the same day. Blue offers multiple ways of delivery and the company is continuously working on offering the best and popular payment methods. Blue does not only sell games but also a lot of computer parts and other home electronics such as WI-FI, cables and everything a tech enthusiast could desire. Retailer Blue pride themselves with having the best with many channels that their customers can reach them on. On their website they have “remote help” where they can take control of the customer's computer remotely and find out what problems they are having. Service and repairs is also part of their customer support.

On their webpage they display rewards and assurance stamps from safe e-shopping to make new customers at ease regarding the trustworthiness of their website. On their different channels such as Youtube, Instagram and they update their followers with the latest games and tech in their assortment as well as announce new sales and special offers. To better interact with their customers Blue hosts almost every week talking about new products

36 on the market and in their stores giving honest reviews that customers can rely on. On their website you can also find competitions that customers can enter into to win components for PCs if they are chosen and leave a honest review of the product on their website.

5.2 Retailer Green

Retailer Green is an independent retailer with an online and physical store who operates in over 40 different countries across the globe. The company has been around since 1994 and started off as a small-town entrepreneur but has been growing at a steady rate ever since. With their extensive industry knowhow, strong finances and known for being a reliable company green is always looking to improve their business. On their website they proudly proclaim that they have the highest rating you can achieve and has had this for 5 years at the time of writing.

Retailer Green is working with all major publishers and numerous distributors all across the world. This means Green is keeping up to date with the latest trends of games and has games for all current consoles. Green is only selling physical copies of video games and has continued to stay strong through the downward trend for sales regarding physical copies. As well as selling games Green is offering accessories for consoles such as controllers that are more retro inspired and that can be interesting for certain nostalgic customers. One of their goals is to extend the lifespan of physical games from old generations consoles to current and next generations. By closely working with publishers Green are adding more merchandise and accessories to the games being sold such as cards and figurines to make them more attractive.

The company's strength according to themselves is its extensive assortment, flexibility and simplicity in the business operations and transactions. The market knowhow is something they have achieved through consumer studies and through their long history of operating in the gaming industry. Through their pages they post news and can interact directly with their end consumers.

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6. Analyzis and results

This chapter begins with empirical data presentation, then analyzis and finally ends by corroborating themes. Empirical findings consist of data gathered from two cases of retailers and consumers. Analyzis has been carried out following previously presented three assumptions based on key concepts, using both primary and secondary data. Finally, based on analyzis core themes have been derived.

6.1 Empirical data presentation

In this section of this report, authors intend to summarize the findings collected from two retailers and video game players or customers, based on which further analyzis has been carried out. Since both retailers have preferred to be anonymous, they are named as Retailer Blue and Retailer Green.

6.1.1 Retailers

6.1.1.1 Case 1: Retailer Blue

Retailing format: Retailer Blue is following the click-and-mortar model. It prefers to cater its customers with the products of their interests through its omnichannel, which consist of physical copies of games, gaming consoles and peripherals, titles from small to large publishers. Its product assortments for video games are based on balancing between ‘need to have’ and ‘nice to have’ products including many AAA titles generating high volumes. At all points of sale in its both online and physical stores, the same assortment of products with the same price are offered. Customers can get their purchased games delivered at home or, can collect them at a particular service point or one of the store locations. According to the product manager, game developer’s business models rarely impact their business operation, but publishers’ (for examples: Steam, Epic, Exclusivity) ways of releasing video games on digital platforms has an impact on their sales.

Retailing activities: To enhance customer engagement during online purchase, they usually replicate all strategies as followed in a brick-and-mortar store, via omni channels. But they admit that lack of personal contact is the only flaw in this model. To overcome it as well as to create more value, they put emphasis on merchandising and bonus systems, soft bundles, pre order bonus and so on. Due to the emergence of online distribution channels, the Retailer Blue

38 has already witnessed a decline in the sales of PC video games, whereas it is not yet the same in case of consoles. Sales strategies are basically designed and implemented taking into account this gradual transformation in the industry. The product manager has further mentioned that it is very difficult to replicate the physical store’s atmosphere in the online store space. Therefore, to give customers a unique in-store experience they promote different events like launching or meet-up with E-sports stars events.

Retailing governance: The Retailer Blue team find it impossible to rely on customer reviews for new games released a few days ahead of the launch date, as they decide on purchase volumes, assortments, splits and so on months in advance. To predict the success of the new game in the market, they basically analyze data from previous releases in specific genres, from specific publishers. Due to technological advancement game developers are now more connected with customers to create hype which impacts retailer’s projected sales volume. In their business model, both monetary and brand value contribute parallelly in this low-margin industry. They find it very challenging to utilize customer lock-in strategy to create a loyal customer base on an online platform. To retain customers, they put utmost importance to secure excellence in customer contact through ‘knowledgeable sales personnel, helpful and polite customer service, fast deliveries and a humble approach’ rather than implementing only incentive strategies. In general they always prioritize the latest technology to achieve operational excellence, for instance faster information flow across the supply chain network. But technology is not always enough to handle certain situations and causes like delay in shipments.

6.1.1.2 Case 2: Retailer Green

Retailing format: Retailer Green is the leading player in the European market operating since 1994 with a strong wide network of partners and customers. It has a click-and-mortar business model. Price is the key factor while designing product assortments. The Retailer Green team targets a particular segment of customers who prefer to have physical copies of games with a price ranging from low to medium and related accessories. They are also official distributors of some good brands. They prefer to supply only physical copies of games with an aim to extend the lifespan of games from old generation to current generation. Though the management has admitted the growing trend of digital downloadable games, they can still foresee the high demands on physical games. In liaison with the publishers, they are keen to

39 deliver extra value to the target customers by adding extra contents in games or other stuff like cards, figurines and so on; which customers cannot get in the digital copy.

Retailing activities: Emergence of digital distribution as well as online retailers have always been a great challenge for Retailer Green. Today during this extraordinary time of COVID-19 pandemic outbreak, the management find this challenging aspect as a threat for all retailers in general across all industries, as business operations have become more e-commerce centric to some extent. But the management is still very much optimistic about their strong position in the industry. They prefer to focus on a low-margin pricing strategy with extra incentives for customers. With the downward trend of physical games Green is also distributing and selling third party accessories more focused on retro consoles but also compatible with the current generation of consoles. These accessories range from a variety of different looking controllers for different consoles to other accessories such as holders. Green also points out the second hand value of physical game copies as they can be sold again when turned in by other customers. This generates extra value from each game resold and is something companies also do with the actual consoles.

Retailing governance: Weekly discount offers on catalogues of games along low pricing strategy have always been a key value proposition to secure their foothold in the market. A wide network of publishing partners, brand manufacturers, retailers, distributors and customers, and a huge assortment of low/midprice games are the core competencies for Retailer Green’s profit maximization. Moreover, the management value contribution from the publishers and the customer insights to design value added trade incentives. In the last 10 years, the management has witnessed a declining trend in physical games, but they are confident about the prospects of their low price game segment in future. To combat this downward trend, they are also offering third party accessories (mainly retro inspired ones) compatible with older to current generation consoles. To retain customers and to have sustainable relationships with their partners, they are very keen to maintain timely delivery and lead times on products. Even though this retailer is following the click-and-mortar model, it is a very physically driven company taking into account all modern ways of business operation. Therefore, the management does not see any significant impact on its operational excellence due to technological shift in the industry.

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6.1.2 Customers

Retailing format: Video game players are found to play games on different platforms like mobile, tablet, personal computers (PC) and consoles. Customers’ choices of store type and the types of games - digital or physical copy vary across the type of gaming platforms. To play games on smartphones or tablets players have no choice but to download from the available on their mobile devices. Physical copies do not exist for mobile devices and so players are directed to the Appstore on Apple devices or Google play on android devices. Customers' choice of platform has been often dictated by their choice of games as many games do not exist on all platforms. For customers playing on PC almost every respondent has preferred and used digital copies of their games for many different reasons. Many stores whether they are physical or digital do not sell physical games for PC and as a result customer mostly download games from online retailers such as Steam, Origin or Epic store. When it comes to console games most respondents had bought physical games in the past and some still do, however a majority of the respondents still buying physical copies are doing so by ordering online rather than visiting a physical store. Respondents revealed that convenience is always a major factor regarding their choice of ordering online with price being the deciding factor. Customers buying discs for consoles said nostalgia often played a part as they like how it used to be when they bought games and that the discs would be fun to have as memories in the future. The respondents playing console and are buying games digitally do this because they think discs are outdated and not ideal to handle. Getting digital copies is seen as a faster way of getting your games and you did not have to worry about losing your disc.

Retailing activities: During the interview’s respondents have been asked about store design and many of the respondents expressed how little they are thinking about this during their purchases. Most of the PC players have said design plays a role in terms of cheap online websites where prices are suspiciously low. Websites with a more professional and less “shady” look as expressed by the respondents are felt to be more trustworthy. Most PC players however stuck with their favorite retailer being either Steam or Origin when buying games as they like having them all in one place or game library. When it comes to physical stores most have paid no attention to the layout, design or atmosphere of the store. One respondent has expressed how some stores such as GameStop felt too exaggerated and not as relaxed as he/she would have liked it to feel. Often price is the only reason a respondent has gone to the store and often does not care about the design of shelves or storespace. Low prices often attract

41 customers to the physical stores and once they are there some like to browse the stores for other attractive products or games. With special offers and a large variety of games, fully stocked stores attract customers who are interested in buying physical copies. However, while being there many often only browsed and later ordered the same products online from other websites using the store only as a gallery. Having a large assortment of games is found to be both useful and unimportant at the same time to respondents. While the assortment mattered as it attracted respondents to the store or website to buy a specific game they often did not care about what other products they had to offer. It is shown to be very important for retailers to have sales and special offers to gain customers and it is equally important that these are communicated in a good way. The online retailer Steam is often mentioned for having a lot of sales and windows popping up showing the user what is on offer which have often resulted in impulsive purchases. Some respondents have expressed how these extra purchases have resulted in having more games than time to actually play them. These digital stores change their offers almost daily while physical stores like GameStop and Mediamarkt have comparingly less sales and higher prices. GameStop in particular is repeatedly mentioned for being too expensive and could not compete in terms of price.

Retailing governance: A majority of the respondents asked about the effect of reviews have stated that these mattered mostly when it came to stores or websites deemed “shady” and not particularly trustworthy. Respondents tend to stay away from sites without reviews but also do not care about negative reviews regarding their own favorite stores. None of the respondents have ever left a review of their own, not even when asked to by popups and would not “go out of my way to leave one” either. Respondents will only consider leaving reviews if they are really disappointed with the service but are generally never commenting on the state of the store or website. Respondents generally care more about reviews of the actual games than the stores and will consider leaving comments about bugs and technical issues for the developers. When it comes to Google's new game streaming service Google Stadia the respondents familiar with the service are very cautious. They are all reading reviews or watching videos of people using the service to see if it is any good and is living up to people's expectations. None are using the service and generally they are all waiting for the service to mature and acquire a better and bigger library of games.

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In terms of assortment co-creation respondents have mentioned Steams wishlist where you can add games you would like to buy that in turn tell developers and retailers how many people are interested in the game and can use this to predict sales.

6.2 Analyzis

After summarizing all empirical data collected from both retailers and customers along with secondary data on retailers, in this part of the report authors intend to connect those findings with previously stated assumptions for further analyzis.

Assumption 1:

Both retailer Blue and Green have a click-and-mortar business model and following the changing aspects of the industry, they have adopted new technologies in their retailing format and activities at different levels. Retailer Blue is following an omnichannel strategy to create value for customers as well as to enhance their relationship with customers. In that perspective, the product manager has clearly stated how they have brought changes in their business strategy to combat growing competition due to digitalization:

“We have an omnichannel strategy where our aim is to supply our customers with the same assortment and prices at all our POS whether it be online or in a store. As for customer value, we always try to give our customers something extra when it’s possible ...from soft bundles of steelbooks or other merchandise when they pre-order a game from us.”

From the interviews it is revealed that both retailers are very much aware of the fierce competition in the industry due to digital distribution. But at the same time they are very specific and optimistic about their customer segments and the ways to reach them. Pricing strategy with some value added discounts or bonus is found to be a key success factor for both retailers. To differentiate their positions in the market, they have preferred to keep an array of choices for their customers. Among those product assortments, some are next to impossible to be offered by any digital retailers in terms of product experience, such as physical copies of games, added contents or accessories, second hand copies of old generation games and so on. In this regard retailer Green says:

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“Even if digital downloads increase significantly the demand is still high on physical video games. Together with publishers we can also add extra content like in game or other stuff like cards, collectible figurines etc. We are eager to add more value to the products which you can't get with a digital copy.”

While retailer Green has emphasized their strong global network of publishers, distributors and retailers to create extra value for customers via retailing format and activities, retailer Blue has preferred to focus more on enhanced in-store customer experience on their virtual space. The product manager of Blue admits that:

“Almost everything that we perceive to enhance customer engagement in a brick-and- mortar store when it comes to buying or pre-ordering a game can be replicated for online sales. Whether it be customer bonus systems, soft bundles, preorder bonuses etc. One of the major flaws when dedicating to only online sales is the loss of customer interaction in person.”

To overcome this challenging aspect of the click-and-mortar business model, retailer Blue is keen to utilize modern technology and different social platforms, websites as part of their omnichannel strategy to generate value. For example: competition for gamers, podcasts, live streaming on their website and YouTube channel are used to ensure direct interaction with their customers. Moreover, to ensure best value delivered to the customer, both retailers Blue and Green always have prioritized quick delivery service along with extra benefits like pickup at convenient spots, free delivery and return and so on. In this process of value creation, both have mentioned the vital role of technological advancements. To give depth to the retailers comments and offer a different perspective from customers’ thoughts about the core elements of RBM is included to add to the findings of both cases.

After interviewing customers of physical stores it has become clear that most customers are not interacting much with new technology in physical stores or are at least not aware of any such innovation when it comes to retailing. Customers appeared unaffected by any changes to interface design visiting physical and online stores.

“No I don’t think so, I mean when you buy something physical from a website you compare price and such if it is cheaper on CDON or Ginza or something. Design I don’t really think about at all, it is mostly price that I focus on.”

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When it comes to online stores the format of self service is greatly appreciated with respondents liking the ease of use resulting in quick purchases appropriating value for the retailers. Customers have expressed how much easier and convenient it is to order online through retailers websites instead of going to the stores, creating more value for the customers that have to spend less time and money acquiring their games.

“I have however become accustomed to downloading for reasons I mentioned before with it being cheaper, easy and convenient staying home and just downloading.”

Another simply said when asked about going to physical stores:

“No I am just too comfortable and would rather just order my physical games online.”

Most PC users however stick with downloading:

“It is one thing to have physical copies for your consoles but for PC, never, there is just no point. I don’t even have a disc drive for my computer and downloading is just a lot easier.”

Customers often get newsletters and messages about special offers from their favorite stores as they arrange activities like sales. These are often emails or direct messages using functions such as the Steam Wishlist or data about customer preferences to reach customers with interest in specific games that have helped determine the assortment and created value for retailers and customers.

“Other than that it is their frontpage when you start Steam and they have a recommended list based on the games you have where I sometimes find new games to buy. A lot of times I add games to my wishlist and later get a notification that it is on sale and buy it then.”

When adopting new technologies and changing up the format such as opening online stores retailers have to keep in mind the perceived trustworthiness of the website. Many customers worry about the security of their card information when buying games online from unknown or suspicious websites and so design and interface when adopting new technologies and formats is of great importance.

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“Yes in a way, if it looks shady I become a bit suspicious and think “Will I lose my information here?”. I think it kind of happens subconsciously and I would rather stick with the ones I know rather than buying from a website that looks funny.”

From the above mentioned analyzis it is shown that assumption 1 is true and it is as follows:

A1: Adopting new technology in retailing format and activities, retailers can ensure enhanced customer value and engagement.

Retailers have adopted new technologies in their retailing format and activities to engage and interact with their customers, but to some extent customers fail or simply do not bother to recognize their efforts in value creation. So in some occasions there is a gap between retailers switching up the format and customers, moreover retailers need to be more concerned about cyber security to ensure more customer engagement.

Assumption 2:

Both retailers have preferred to work in direct collaboration with the game publishers to promote their products to the end customers. They always value inputs from other actors in the industry such as developers, publishers and customers while planning and designing product assortments in their stores. Both have put immense importance on customer feedback where technological applications have eased their way of communications with different actors. Even though they have not specifically explained how customers are contributing in value creation in terms of retailing governance, they have expressed how keen they are in accepting their thoughts. In that context, retailer Blue has pointed out how publishers are contributing in both value creation and value appropriation process by sharing previous data:

“For specifically the video game business area reviews for new games are released just a few days ahead of launch date. So, to rely on reviews for new games is not possible, purchase volumes, assortment, splits etc are all decided months in advance. However, we can use data from previous releases in specific genres, from publishers etc. to gauge the success of an upcoming game.”

In the response to the question on what value they gain from the market by selling goods via their chosen channels, both retailers have divided the value appropriation process into two aspects of value: brand and monetary. Due to the quick digital release of many video games and the booming digital distribution channel, retailers are facing hard competition, which have

46 made them more strategic about offering products at low price. As a result, both are operating in low-margin market segments, but with a high volume of sales. In that context, both have emphasized on having a tight tie with all renowned branded publishers to uplift their own brand value in the industry. Blue has stated that balancing between both monetary and brand values outway their costs to move forward. Thus, on the one hand the technological shift in the industry has impacted their profit maximization, but on the other hand has strengthened their network of different actors to generate brand value as a driver for profit generation. Moreover, Blue has talked about developers’ influence on customers as well as role in creating hype in the market before releasing any game; which always impacts retailer’s sales volume both positively and negatively. Both retailers have found developers, publishers and customers as co-producers in their value appropriation process. More specially, customers’ interest in different third party accessories have opened up new opportunities for retailers at the declining phase of physical copies of games. According to the retailer Green:

“Physical sales of video games are indeed decreasing and have done the past 10 years. No doubt about it. However, since we are focusing on low price games the margins are still with us thankfully. To meet the downward trend on physical games we are also distributing third party accessories (mainly retro inspired ones) compatible with older to current generation of consoles.”

In terms of customer retention, Blue has argued that incentive driven customer lock-in strategies are not enough to create a sustainable loyal customer base on the online store space. Therefore, they prefer to create value in cooperation with their customers through excellent customer contact and services.

While retailer Green has claimed that they are a more physically driven company, retailer Blue has admitted the influence of technological advancement to achieve their operation excellence. However, Blue has also talked about some unavoidable incidents in the shipment process which cannot be solved by modern technology.

The respondents of this study talked about their experiences regarding customer reviews admitting that they almost never left any reviews for stores to improve upon their interface or design. One respondent simply stated:

“No I don’t. I talk about websites and platforms with friends but I never leave any written reviews about websites or stores to others outside my circle of friends.” 47

Another would skip giving retailers feedback: “No I always press “not now” if it pops up asking for feedback or my opinion about the store or games.”

Similar responses by other respondents a bad picture regarding much needed feedback for retailers to deliver enhanced value. Despite the technological development offering easy ways of leaving reviews many seems to ignore this for trivial reasons.

Many respondents also report reading other customer reviews when ordering online. These are often left online and contribute to enhancing value for customers by giving them honest feedback and help retailers enhance value appropriation.

“Yeah that probably plays a bigger role actually, to me it plays a bigger role than design because you want to know that you are going to get your stuff and get service and so on. If I see one site with 5 stars and one with 2 then of course I pick the one with 5 stars even if it is a bit more expensive”

In terms of co-creation respondents mentioned adding games to their Wishlist on Steam, this tells Steam, developers and publishers the number of people interested in the games and allows them to set up a sales plan to gain value from customer demand.

“A lot of times I add games to my wishlist and later get a notification that it is on sale and buy it then.” analyzing both retailers’ and customers’ feedback, assumption 2 is found to be true which is as follows:

A2: Different actors’ contribution in a retailer’s governance mechanism due to technological development can create enhanced value for customers, which in turn can help the retailer to maximize value appropriation.

Different actors’ contribution is found to be an integral part in both value creation and appropriate in the retailer’s business operation, where technology plays the role of a springboard to accelerate the process. Customers are very keen to read and receive good feedback and reviews while making purchase decisions, but there is a gap where many customers do not bother to contribute to this process. Customers often just skip writing reviews

48 and rely on others to provide them with honest information even if they have had a bad experience themselves. Since price works as a key motivating factor for most of the customers, retailers need to be more proactive to engage customers on the same platform equally like the other actors like publishers and developers to create unique values. Retailers need to provide an incentive to write honest reviews to create value but also avoid going into bribing territory.

Assumption 3:

Referring to the analyzis on assumption 1 and assumption 2, it is revealed that both retailers have reshaped their business operations and strategies to some extent by adopting technological transformation in the industry. They have tried to create new options and have applied omnichannel strategies to deliver value as well as to appropriate the value. Expanding business on the digital platform in parallel to the physical outlets has brought changes in retailing format and retailing activities, which in turn has also impacted retailing governance. A single change in retailing format like online store has brought changes in other elements - retailing activities and governance gradually to sync each other’s roles. Since both retailers are simply balancing between their physical and digital operations following a click-and-mortar business model rather than completely switching on the digital platform, there is no radical innovation in their business model. Moreover, both have followed industry trends to generate new options to expand the market or to grab a new customer base.

With retailers adopting new formats and creating online stores to access more customers this changing format is resulting in changing business strategies. Respondents talk about how many online stores are reaching out to customers and is announcing sales of their favorite games based on previous interactions. With collected information retailers plan out so that games of a similar type is on sale at the same time resulting in impulsive purchases by customers generating value for them and the retailers. One respondent explained his thought process:

“Well Steam is very good at having all these different sales pretty often, summer sale, winter sale, , but also all these random sales of different games where I often think that I should take the opportunity now that it is on sale. Which is also a bit stupid since I keep buying games that I often don’t even have time to play.”

Finally, assumption 3 is found to be partially true, which is as follows:

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A3: A change in existing one or more elements in the retailing business model (i.e. retailing format, activities and governance) lead to change in other elements resulting in a retail model innovation and generate new options for value creation and appropriation.

Changes in selling platform and strategy have made retailers bring change in retailing format which has a chain effect of changes on retailing activities and governance for both value creation and appropriation. The change in format has brought along new ways of organizing sales and special offers. Now with retailers having access to more personal data and preferences they can create customized offers and incentives to come back to the website. This chain effect of changes on those three elements of the retail business model have created different opportunities for retailers to reach customers following new strategies and channels but have not brought any drastic change in their business model to claim an innovation in the retail business model.

6.3 Corroborating themes

After carefully reviewing and analyzing all gathered data, authors have extracted codes and have connected different sets of codes based on three theory driven thematic nodes naming Retailing format, Retailing activities and Retailing governance. These sets of data are organized following the research question and the conceptual framework to recognize emerging patterns for further analyzis. To conduct this thematic analyzis, authors have focused on similarities and differences between different clusters of data relating the research question, to figure out any potential conflict. Following the key concepts and the proposed research model, data under each thematic node has been framed. Here, the concepts of value creation and value appropriation in the retailing business model have worked as key drivers. The following table (see Table 5) depicts connection across different sets of codes as an initial stage to derive clustered themes and core themes to have a clear picture of the whole phenomenon.

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Retailing format Retailing activities Retailing governance

● Retailer’s online format is ● Value driven pricing ● Incentives to contribute to more attractive and adds strategy and incentives are the value creation by value when ordering the key success factors for leaving reviews is crucial physical copies for reasons retailers to combat the for retailers. of convenience. competition. ● Retailer’s strong network of ● Retailers need to consider ● Omnichannel strategy publishers, distributors and customers' choice of format enables retailers to reach all customers can add extra is often based on the generation customers and value in product offering customer's preferred deliver value. and enable profit console when targeting maximization. customers. ● Creating real time in-store experience using ● Brand value out ways ● Retailers need to focus technology can enhance retailer’s cost and generates more on price, as price can customer engagement and volume in terms of value motivate customers to buy a differentiate themselves appropriation, while physical copy over a digital from competitors. operating in a low-margin one. market segment.

● Cyber security and trust are ● Not replicable product important factors for offering with added values retailers to secure a loyal works as a core factor for base of customers on online retailers to reach a platforms. particular market segment.

● Technology plays a significant role to ensure retailer’s excellence in supply chain management.

Table 5: Connection across different sets of codes.

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At this phase, authors have further analyzed different sets of coded data extracts to combine most relevant ones and to form an overarching theme. As a consequence, a set of clustered themes have been developed narrowing down to three core themes reflecting on the phenomenon; which are presented in the following Table 6:

Clustered themes Core themes

● Transformation of format to digital ● Well communicated pricing strategy and platforms leads to use of omnichannel value driven incentives strategy to reach a wider range of customers via effective communication. ● Encourage customer engagement and reviews via activities and interaction on ● Value driven incentives and pricing strategy online platform are crucial to motivate consumers to buy a physical game over a digital one and retain ● Trustworthy and secured digital platform them. connecting all actors

● Replicating the physical store atmosphere on the online store is vital for click-and- mortar retailers to enhance customer engagement in the value creation process.

● Incentives to contribute to the value creation with reviews is important for managing trustworthiness and perception of cyber security.

● Strong network of different actors along with their brand value contributes to value appropriation such as profit maximization & excellence in the supply chain.

Table 6: Corroborating themes

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In summary after analyzing results from both retailers and customers’ perspective, it can be seen that for retailers to be successful they need to have planned pricing strategies and be able to communicate these to their customers and have value driven incentives. To help create value for both retailers and customers they need to find ways to engage customers and encourage them to interact more and leave reviews for others to read. This helps with conveying the reliability of the store or website that can be effective platforms for other actors to gather and contribute in both value creation and appropriation.

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7. Discussion

After presenting the empirical findings and analyzing and explaining each assumption based on results, this chapter reflects on further analyzis of the result in relation to previous research. Focusing on connections between explored theoretical foundation and the results, a revised research model along with propositions have been presented.

Changing landscape of retailing

Regardless of the industry type, technological revolution and consumers’ easy access to internet service have brought revolutionary changes in business models (Gatignon et al. 2017; MacKensey and Company 2017; Zott et al. 2011; Wirtz et al. 2010; Chen 2003), more specifically in retailer’s business model (Weill and Woerner 2013; Betzing et al. 2018). According to this study, this phenomenon has also been witnessed by the retailers in the video game industry. Both retailers in this case study have further explained that industry trends and consumer preferences have reshaped their business operations and made them more lean towards adopting e-business models as argued by Phillips and Wright (2008). More specifically in this industry, the physical store that is the brick-and-mortar retailers (Piotrowicz and Cuthbertson 2014; Reinartz et al. 2019; Enders and Jelassi 2000; Phillips and Wright 2008) have almost been phased out and the click-and-mortar retailers are struggling to combat the fierce competition by the online retailers and the publishers releasing digital games. Now, a question might arise about why they are still following the click-and-mortar business model (Adelaar et al. 2003) rather than the online (Turban et al. 2009; Doong et al. 2010) one. In that context, the case of retailer Blue and a few number of customer feedback have pointed out that the missing aspects of customer contact in person and customer’s emotion across ‘touch, feel and try’ the product perspective (Adelaar et al. 2003; Enders and Jelassi 2000) on the online store work as drivers for retailers to follow the click-and-mortar model. Moreover, the ‘nostalgic’ feeling motivates some customers to buy physical copies and to be in a physical store, browse products and make impulsive purchase decisions. The increasing popularity of retro and vintage physical games and consoles is also a contributing factor for companies to still operate with physical stores as pointed out by the retailers in this study.

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Retailer’s business model

This multiple-case study reveals that in response to the transformation in the video game industry, both retailers have embraced e-commerce (Baden-Fuller and Haefliger 2013) to create new options for value creation and capture as opined by many researchers (Zott et al. 2011; Zott and Amit 2010; Casadesus-Masanell and Ricart 2010; Baden-Fuller and Haefliger 2013; Baden-Fuller and Mangematin 2013; Teece 2010; Ruggieri et al. 2018) in collaboration with different stakeholders and partners in the industry ecosystem (Müller et al. 2018; Zott and Amit 2010; Sorescu et al. 2011). Since in this industry all actors like customers, retailers, developers and publishers are all well connected via digital platform, theoretically these two click-and-mortar retailers’ way of business operation more fits into Sorescu et al. (2011)’s proposed retail business model (RBM). Moreover, the empirical findings have revealed a few more practical aspects to be considered in the RBM to make it function well. In reference to the RBM (Sorescu et al. 2011), both retailers Blue and Green are found to be keen to adopt technology in each three elements: Retailing format, Retailing activities and Retailing governance to engage all actors in their overall value creation and appropriation process. To enhance customer experience and engagement, retailer Blue is found to implement omnichannel strategies through channel integrations as suggested by many researchers (Steinfield 2002; Piotrowicz and Cuthbertson 2014; Cao 2014) for the click-and-mortar business model. But from consumer perspectives, lack of well coordinated communication or gap between customers and retailers, and emerging issues of credibility on the online platforms have made consumers less motivated to be engaged than as perceived by the retailers. Both cases of retailers reflect on the importance of technology to integrate different actors in creating value and maximizing profit and brand value via value appropriation process (Sorescu et al. 2011; Müller et al. 2018; Zott and Amit 2010). But at the same time opinions from both retailers and customers reveal customers’ tendency to skip the review process to contribute in value creation. Though in this multiple-case study both retailers have not employed any innovation process in their retail business model, they have rather transformed their existing business model by adopting technological changes as agreed by Baden-Fuller and Haefliger (2013) as a way of survival in this dynamic industry. In this context, following Sorescu et al. (2011)’s arguments, changes in one element of the RBM has also brought changes in other elements to make this business model feasible.

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Furthermore, during the value creation process both retailers are found to follow Sourscu et al. (2011) suggested three design themes like customer efficiency, customer effectiveness and customer engagement to some extent. They ensure customer efficiency in business operation by offering products in many different ways making it as easy as possible for customers to get access to their products. They have done this by both using physical stores and websites to sell their games making them easily accessible both for customers looking for that in store experience and customers looking to conveniently purchase their games from the comfort of their homes or on the go. Great customer support in stores and optimal search engines enable customers to find what they need quickly and is something both retailers prioritized. With a wide assortment both retailers in this study try to cater to the customers wants and needs showcasing their customer effectiveness. With respondents pointing out the importance of a large or right assortment as they often are looking for specific games it is important to keep up with the latest trends and continuously update their assortment. Finally, the retailers are both keen on improving customer engagement by hosting competitions, live streams and providing incentives to leave reviews and offer feedback regarding retailers operation to enhance value for customers and appropriate value for retailers.

Future of the industry

After analyzing customer responses, feedback from retailers and articles about the industry it is clear that the future looks bright for the gaming industry as a whole (Beattle 2020; Banks 2018; Statista 2019a). Both retailers have admitted their challenging position in the industry, as technological advancement has created new form market collapsing boundaries between customers and manufacturers (Phillips and Wright 2008). For physical copies the idea of the future is somewhat split and customers are not necessarily of the same page as retailers. They all agree digitalization is affecting the future lifespan of physical copies and that digital purchases of games is going to increase with the evolution and modernization of consoles making use of their own digital marketplaces and game streaming services (Waldner et al. 2013; Morris 2018). This looks bad for retailers selling physical games but respondents also agree that a lot of people still enjoy the physical format and the retro and vintage games available on older consoles. All respondents including retailers were however still skeptical regarding Google's game streaming service Stadia saying they are too far ahead and that the

56 infrastructure is simply not there yet, thinking it might be better in a few years with a bigger assortment of games.

Retailers are still optimistic about the future of physical copies for the foreseeable future but realize that they too have to adapt further to trends and new ways of distribution of games (Toivonen and Sotamaa 2010; Morris 2018). Respondents are becoming more used to downloading digital copies and ordering online stating that they will be phased out eventually looking at industries such as film and music as relevant examples of what is to come.

Considering the empirical findings of this study authors have proposed the following revised research model (see Figure 2) to have a comprehensive view of this ongoing phenomenon relating to the research questions. This model can be used for further theoretical and empirical research within this field.

Figure 2: Modified research model: Adapted from “Innovations in retail business models” by Sorescu et al. (2011)

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Authors have agreed on the following propositions based on the analyzis and the revised research model:

Proposition 1: Adopting new technology reflecting retailer credibility in retailing format and activities, can ensure enhanced customer value and engagement.

Proposition 2: Different actors’ contribution in a retailer’s governance mechanism due to technological development can create enhanced value for customers, which inturn can help the retailer to maximize value appropriation.

Proposition 3: A change in existing one or more elements in the retailing business model (i.e. retailing format, activities and governance) can lead to change in other elements and generate new options for value creation and appropriation; but not necessarily result in a retail model innovation.

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8. Conclusions and contributions

This chapter contains conclusions drawn based on empirical findings with regard to each research question and both theoretical and practical contributions in this field of research.

8.1 Conclusions

Since change in one element of the retail business model impacts other elements to adopt some changes, all elements need to be well integrated and synced. Moreover, different actors in the industry ecosystem play significant roles in each element of the RBM to create value and capture value in collaboration with the retailer. Following this model, retailers need to act on the ongoing shift in the video game industry to keep pace with other actors. If video game publishers, developers and customers completely upgrade their state in accordance to the digital transformation of the industry, retailers would need to adopt this transformation in their business model to make those actors contribute to their operation. Otherwise, click-and-mortar retailers will gradually be phased out of the industry ecosystem. According to different researchers (Zott et al. 2011; Zott and Amit 2010; Sorescu et al. 2011; Ruggieri et al. 2018) it is revealed that value creation and appropriation are core concepts of a business model, where from the retailers’ perspective retailers need to engage other actors to make it viable in the near future. Through that perspective practical findings from this study can help retailers with engaging actors by taking a few steps, such as ensuring a credible digital platform with better incentive strategy in product offerings and review process. Moreover a better communication strategy can accelerate retailers’ existing omnichannel marketing approach.

Though both retailers have acknowledged the immense pressure from digital distribution channels, their distinct position in the particular market segment can secure their future. Digital platforms such as Steam which are middlemen for developers and customers providing a space to make business are important but make some consumers worried about the future consequences such as losing all games if the service were to be shut down. In that context, click-and-mortar retailers can expand their digital operations by capitalizing on the brand value of their physical store.

Going back to the questions presented by the authors at the beginning of this paper it is clear that e-commerce and digital sales have a great impact on the business model of retailers in the industry. Retailers are having to adapt to the trend of online shopping and change up how they interact with customers and design experiences that create value both for customers and

59 appropriate value for themselves. With new trends and consumers getting used to digital solutions to their needs retailers are changing their formats and in so doing also redesigning activities to better suit the new formats to engage and attract customers and encourage them to contribute to the value creation and appropriation process. The contributions from different actors like publishers, developers and consumers is of utmost importance for retailers as it affects things such as product assortment, sales activities, formats and more. Customers contributions with reviews creates value for the retailer and other customers looking for trustworthy places to buy while publishers and developers contributions with incentives and special offers can attract customers to the stores. Customers interacting and engaging with retailers enable retailers to collect important information about wants and needs and future trends enabling retailers to plan ahead and design sales activities.

For more than 100 years, retailers in different industries have been selling through multiple channels in response to the dynamic changes in the business environment (Cao 2014). In the video game industry, the impact of pervasive technological advancement is now more than industry trend or transformation. During this extraordinary time of COVID-19 pandemic outbreak all industries have realized the importance of e-commerce to combat any economic strain in near future, which has also been echoed by the retailers of this study. In a -shell, retailers need to balance between physical and online operations to face the future challenges.

8.2 Theoretical contributions

Authors’ revised research model and proposed three propositions indicate theoretical contributions in a relatively less explored field of research from two perspectives such as the empirical field of retail business model and the industry specific study. Sorescu et al. (2011)’s proposed business model not only encompasses two core concepts of value creation and appropriation, but also offers a customized solution to the retailers with six design themes to refine its function. Other widely used business models solely address manufacturers’ point of views. In that perspective, this study based on Sorescu et al. (2011)’s RBM presents some insightful findings taking into account the phenomenon of digitalization to enrich knowledge in this field at application levels. Moreover, this multiple-case study within the context of the video game industry in Sweden has reflected on how retailers have adopted technology and integrated other actors in their business models as a survival strategy at the verge of industry transformation. Though the nature of qualitative study does not allow researchers to formulate

60 a generalized understanding, the findings of this study contribute in academic and practitioner- oriented interdisciplinary research fields.

8.3 Managerial implications

The sales of physical games are on the wane in comparison to wide options for playing video games on different platforms. But the segment specific market position of click-and-mortar retailers selling physical copies is still promising as uttered by both retailers. With such a notion, based on the insightful feedback from both retailers and customers, authors have come up with a few suggestions for the retailers to adopt into their business.

Respondents realized that by ordering online the physical stores suffer from lack of customers coming in and offered advice on what would incentivize and attract them to the stores. One suggested a form of store that has become popular with board games which are the board game cafes and adapting that but for video games so customers can get first hand experiences trying out products and be more engaged. Some arcade cafes already exist and being able to come into a store, sit down and play is something that could be attractive for customers looking for something new in a relaxed atmosphere. Some stores have implemented this to a degree but not committed fully which has resulted in game setups in stores being unused and unattractive.

This study reveals a gap between customers and retailers, where customers are found to be less motivated or enthusiastic in contributing their customer feedback or reviews. But on the other hand, retailers are very keen to hear from their customers directly to refine their business operations. In that context, retailers need to create a more vibrant and engaging atmosphere in their online store space to make customers more engaged. Regular interactive activities like quiz, incentives promoting games on omnichannel options could be a good step. In this regard a fine-tuned communication strategy integrating all channels and a credible online platform are crucial for the retailers’ to get their customers in their network of stakeholders.

When it came to prices of games it is clear that physical retailers need a more aggressive pricing and sales strategy. Respondents made it very clear that price was a major factor when deciding which store or online website to visit. Some however would even order online even though it was more expensive just for the convenience and so it needed to be a great bargain for customers to visit physical stores. Respondents stated that the lack of sales and high prices was some of the reasons they stopped going to stores like GameStop. Managers need to implement

61 a pricing strategy so they are able to compete with online stores and if not they need to find a niche that separates them from the other. Online stores can have new sales each day and physical stores need to find a way to match this and find out what games people would like to have discounted and what they might buy additionally.

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9. Limitations and further research

This chapter presents encountered limitations during this study. Moreover, the scope of further research in this field has been explored.

9.1 Limitations

9.1.1 COVID-19 data collection interference

While collecting data for this study, the authors have encountered an unforeseen problem which has affected the authors’ ability to collect data from both retailers and customers. By the time the questions have been ready to be sent out and interviews of customers could begin, COVID- 19 has started spreading more rapidly around the world. This has resulted in business slowing down for many companies as social distancing restrictions and general panic have made customers stay at home and avoid going to stores. This sudden economic downturn has made retailers refocusing their efforts and attention away from nonessential activities. Many retailers simply did not have the time to answer questions anymore even though they had said yes to doing so months earlier. This situation however did not have a huge effect on completing customer interviews. About half of the interviews have been done remotely and the rest in person. The situation is still on people's minds. But authors have respected social distancing and have kept safe distances when conducting interviews. However, applications of different techniques have further challenged authors to ensure spontaneity of the interviews.

9.1.2 Legal and contractual limitations

During data collection the authors have also encountered some legal limitations. Often the problem is not the company that has been contacted, but the parent company. They do not think that they could answer these questions without revealing too much of their business plans and strategies and have sent the questions along to their legal departments which have declined our request of getting answers. They have decided that even the general questions regarding their thoughts about the future would be too revealing and have declined giving shallow and more surface level answers. This has happened more than once and limited the study by not acquiring the insight needed from these particular actors who have extensive market knowhow. These actors are worried that they would not remain anonymous even with a non-disclosure agreement since other actors would most likely be able to identify them through their answers.

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The contact person at the company is very sorry and has said that unfortunately this is the drawback of working with big international publishers.

9.2 Further research

This qualitative research can work as a foundation to conduct further research in this industry following two probable ways such as:

1. A longitudinal case study on two specific types of retailers that is click-and-mortar and online over a lengthy period to investigate how retailers are reshaping their business model gradually in response to the industry transformation.

2. Another option could be a quantitative study to measure interdependencies of three elements - retailing format, activities and governance in the revised research model and to test their effects on customer experience and retailer’s performance.

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Appendix 1: Structured interview schedule and interview guide Structured interview schedule for video game retailers Introduction: This research paper focuses on the ever-changing video game industry and the retailers selling video games to consumers. With the brick and mortar retailers are struggling to stay afloat, and this is especially apparent in the video game industry. Stores selling physical copies of games are losing customers who opt for digital downloads of games from a variety of online platforms. This change is partly due to changing customer wants and needs as well as game developers embracing new ways of distribution to meet those same needs. It is an unsure future for retailers with no clear guideline to follow and deciding whether brick and mortar businesses are still relevant in today’s market is yet to be determined. We value your company’s privacy and your valuable time. If you want us to keep your name or company name anonymous, please let us know. Moreover, you can skip any question if you find yourself unable to answer. Please contact us if you have any questions.

Name of the interviewee (optional): Name of the company (optional): Position in the company:

1. How do you decide on different retailing mix such as product assortment, pricing strategy, location (point of purchase), customer interaction to deliver customer value? Does technology impact your choice? If so, then how? 2. How do you sell your games today and why? Do you use click-and-mortar (physical and online combination) or online format of retailing to sell your products? Does the game developer’s business model affect your choice? 3. How do you contribute to enhancing customer engagement choosing a specific format of retailing such as either click-and-mortar or online store? Does digital technology play any role in this regard? How? 4. (a)What value (e.g. monetary, brand) do you gain from selling the games the way you do? (b)Does any specific type of distribution channel or technology impact your choice? 5. Do you consider customer reviews when designing product assortment and customer interface? Example? If so, then how does it impact your customer engagement? 6. Has your selling strategies changed with the availability of online distribution channels? If so then how? 7. Do you use strategies such as customer lock-in and other incentive-creating strategies to retain customers, giving them reasons to come back? 8. How does new technology influence your supply chain to achieve operational excellence? 9. Do you think both game developers and customers work more as co-producers in your value appropriation process (e.g. profit maximization) due to technological advancement in the industry? How does it impact your business model? General questions 10. What do you think about the future of physical video game copies? Will physical copies still be sold in 5 years from now? How does that affect your business? 11. Can you briefly tell us about your business model? Have you adopted any change to it due to digitalization of the industry? 12. Do you have anything more to tell us about the market and its future? 13. Any thoughts about Google Stadia?

Interview guide for customers

Name of the interviewee : Age: Sex: Nationality (optional): Control questions: 1. Do you play any kind of video game? 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? 3. How often do you play?

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Questions connected to retailing business model:

4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/appstore? Why? 5. Does the store interface/design impact your decision to buy/download games? In what way? 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? 7. How does customer reviews impact your choice of retailer for games? Why? 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why?

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? 14. Any thoughts about Google Stadia and its future? Is this a service you would use?

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Appendix 2: Retailer scripts Retailer Blue

Name of the interviewee (optional): Anonymous Name of the company (optional): Anonymous Position in the company: Product Manager

1. How do you decide on different retailing mix such as product assortment, pricing strategy, location (point of purchase), customer interaction to deliver customer value? Does technology impact your choice? If so, then how? It depends on what you include in the word technology. When it comes to product assortment for video games we see a need for balance between “need to have” and “nice to have” products. We cater our assortment to the perceived interests of our customers. There are many AAA titles which you need to have, as the volume is high and sustainable over time. You cannot be without them. There are also many titles which are nice to list in our assortment to differentiate us from our competitors. We have an omnichannel strategy where our aim is to supply our customers with the same assortment and prices at all our POS whether it be online or in a brick and mortar store. As for customer value, we always try to give our customers something extra when it’s possible. From soft bundles of steelbooks or other merchandise when they pre-order a game from us. We use all data available to us in order to inform our decisions on which titles to list, what volumes to buy, and how to divide our stock between online sales and stores individually. 2. How do you sell your games today and why? Do you use click-and-mortar (physical and online combination) or online format of retailing to sell your products? Does game developer’s business model affect your choice? We use what you refer to as click-and-mortar. Customers can choose to have their copy delivered home, to a service point or to be picked up at one of our locations. At this point in time we only sell boxed copies of games. We use this model as we find that it is a good way to see to our customer needs. A game developers business model very rarely affects our choice. 3. How do you contribute to enhancing customer engagement choosing a specific format of retailing such as either click-and-mortar or online store? Does digital technology play any role in this regard? How? Almost everything that we perceive to enhance customer engagement in a brick-and-mortar store when it comes to buying or pre-ordering a game can be replicated for online sales. Whether it be customer bonus systems, soft bundles, preorder bonuses etc. One of the major flaws when dedicating to only online sales is the loss of customer interaction in person. We are very dedicated to giving our customers unique in-store experiences for example launch events, or meeting E-sports stars in store. That creates a value for us which is very difficult to replicate in an online environment. 4. (a)What value (e.g. monetary, brand) do you gain from selling the games the way you do? (b)Does any specific type of distribution channel or technology impact your choice? A) We gain both monetary and branding advantages from selling games the way we do. Albeit a low-margin business area the gains both monetary- and branding wise out way the costs. B) They do, and the way the publishers intend to release their game (steam, epic, exclusivity) has an impact on our impact in selling games the way we do. 5. Do you consider customer reviews when designing product assortment and customer interface? Example? If so, then how does it impact your customer engagement? It depends on what you are asking. For specifically the video game business area reviews for new games are released just a few days ahead of launch date. So, to rely on reviews for new games is not possible, purchase volumes, assortment, splits etc are all decided months in advance. However, we can use data from previous releases in specific genres, from publishers etc. to gauge the success of an upcoming game. So, in that respect, yes. As for customer

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interface, we take on board all customer feedback (we do not get reviews as such) and discuss at high levels in the company. We then use this information when conducting improvements in our interface. 6. Has your selling strategies changed with the availability of online distribution channels? If so then how? Yes, we are seeing a decline in PC sales since online distribution has taken hold of the market. The decline is not as noticeable for consoles, at least not yet. This is of course something we take into consideration when implementing our strategies moving forward. 7. Do you use strategies such as customer lock-in and other incentive-creating strategies to retain customers, giving them reasons to come back? Using customer lock-in as a retailer of video games is quite a challenge. A retailer is essentially a company moving boxes from publishers to end customers and making that journey as pleasant as possible for the end customer and being on time. Making a customer dependent on us when online sales are as transparent as they are is a very difficult challenge. We use customer incentives, bonuses, merchandise etc as a way of enticing customers to come back to us. The main way we retain customers is commitment to excellence in customer contact, all aspects. Knowledgeable sales personnel, helpful and polite customer service, fast deliveries and a humble approach. If we are perfect in these areas, the bonus incentives are not as important. 8. How does new technology influence your supply chain to achieve operational excellence? If were talking about the supply chain as a whole, it would be impossible to say that it doesn’t. Our business systems are built on the latest technology and are constantly evolving to keep us up to date. For the product supply chain there is not a whole lot that new technology can help us with. There are still many factors which technology cannot help us with. The most obvious being delays in shipments, where the causes can’t be counted as there are so many. Our information supply chain however is greatly helped by new technology and we are constantly updating how we use the tech to better improve our internal operations. We are always looking to improve the flow of information between relevant departments. 9. Do you think both game developers and customers work more as co-producers in your value appropriation process (e.g. profit maximization) due to technological advancement in the industry? How does it impact your business model? I’m not entirely sure I understand the question, I’ll try to answer it as best I can. When game developers build hype and connect with our customer base it has great impact on projected sales. There can however be instances where it has the adverse effect, see for example Fallout 76.

General questions 10. What do you think about the future of physical video game copies? Will physical copies still be sold in 5 years from now? How does that affect your business? Yes. We will however see a great decrease in physical copies moving forward. There are still many customers who see their archive as a collection and want to be able to display it, as with any other collection. This is truer for console players than PC players today in our opinion. That may be due to the prevalence of steam etc for a long time. There are usually industry shifts behind such large behavioral changes to consumer behavior. For instance, CD-readers are nowhere to be found in PCs today. Which in turn facilitates digital sales of games. Microsoft has tried the market with their “all digital” version of Xbox One. How this affects our business in the long term is hard to say right now, it all depends on how we adapt to the new reality. 11. Can you briefly tell us about your business model? Have you adopted any change to it due to digitalization of the industry? We sell physical copies of games, gaming consoles and peripherals through our omnichannel. We sell titles from small publishers to large AAA titles for most gaming platforms. Through our assortment- and omnichannel strategy we aim to cater to our core customer base as well

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as reaching new customers through different marketing schemes. Our business model needs to be adaptive and agile, so we are able to keep up with the current state of affairs.

12. Do you have anything more to tell us about the market and its future? Gaming and video games have a bright future. We are seeing great increases in user base for both console and PC gaming. We are also still at the very beginning of the e-sports genre. For retailers there is great importance to listen to the market wants and needs, to adapt to further digitalization and find new value propositions. 13. Any thoughts about Google Stadia? It’s a great idea and could be a big part of gaming moving forward. Now, the infrastructure is not in place, regarding many aspects, to be able to reap full market penetration.

Retailer Green

Name of the interviewee (optional): Anonymous Name of the company (optional): Anonymous Position in the company: Anonymous

1. How do you decide on different retailing mix such as product assortment, pricing strategy, location (point of purchase), customer interaction to deliver customer value? Does technology impact your choice? If so, then how? As a global wholesaler/distributor focusing on low and mid price physical video game software and related products we are in the third segment after developing and publishing. To maintain the price point is therefore the key to succeed as a retailer/distributor of these kind of products. The consumer interaction then comes with the retailer. Though as an official retailer/distributor of brands its important to support and always be there for questions etc. 2. How do you sell your games today and why? Do you use click-and-mortar (physical and online combination) or online format of retailing to sell your products? Does game developer’s business model affect your choice? We only supply physical copies with the goal to extend the lifespan on games from old gen to current gen. Even if digital downloads increase significantly the demand is still high on physical video games. Together with publishers we can also add extra content like in game or other stuff like cards, collectible figurines etc. We are eager to add more value to the products which you can’t get with a digital copy. We sell our games through a wide customer network combining other wholesalers with retail and e-commerce globally. They can then decide how they want to promote the products and we are there to support them as good as we can. 3. How do you contribute to enhancing customer engagement choosing a specific format of retailing such as either click-and-mortar or online store? Does digital technology play any role in this regard? How? Like mentioned above, digital technology increases year by year. Though there’s still a huge demand on physical video games and the value you can add to it. You can also add the second hand value of a physical video game with trade ins etc. 4. (a)What value (e.g. monetary, brand) do you gain from selling the games the way you do? (b)Does any specific type of distribution channel or technology impact your choice? (a) We are B2C and B2B and the way we work is with direct contact with weekly offers on a back catalogue basis with a huge assortment of low/mid price games. (b) Mainly through e- commerce retailers and distribution partners. 5. Do you consider customer reviews when designing product assortment and customer interface? Example? If so, then how does it impact your customer engagement? We are happy to receive all kind of feedback from our retail customers. We can use this when communicating with publishing partners and brand manufacturers. 6. Has your selling strategies changed with the availability of online distribution channels? If so then how?

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E-commerce is still growing stronger (current corona-situation is also a reason to this) retail stores are struggling as in all other industries. 7. Do you use strategies such as customer lock-in and other incentive-creating strategies to retain customers, giving them reasons to come back? From a distribution view we are keen to make our partners/customers satisfied with our deliveries and lead times on our products We have been in the gaming industry since 1994 and we are still one of EUs leading retail/distribution companies coming to back catalogue video games. 8. How does new technology influence your supply chain to achieve operational excellence? We’re a very physically driven company working with a simple but modern way of distributing our products – so I would say technology doesn’t affect the way we work logistically. 9. Do you think both game developers and customers work more as co-producers in your value appropriation process (e.g. profit maximization) due to technological advancement in the industry? How does it impact your business model? Physical sales of video games are indeed decreasing and have done the past 10 years. No doubt about it. However, since we are focusing on low price games the margins are still with us thankfully. To meet the downward trend on physical games we are also distributing third party accessories (mainly retro inspired ones) compatible with older to current generation of consoles.

General questions 10. What do you think about the future of physical video game copies? Will physical copies still be sold in 5 years from now? How does that affect your business?

I definitely think that there will be a market for physical games in 5 years from now. The demand will most likely still be there. 11. Can you briefly tell us about your business model? Have you adopted any change to it due to digitalization of the industry? Repeating the answer from question 9. To meet the downward trend on physical games we are also distributing third party accessories (mainly retro inspired ones) compatible with older to current generation of consoles. 12. Do you have anything more to tell us about the market and its future? Backwards compatibility is one of the factors physical games will survive. Questions like if the next and future generations of consoles will be disc based is very important. 13. Any thoughts about Google Stadia? Google Stadia turned out to be a flop and its still to early with full time streaming of games. I do think that streaming is the future somehow and the possibilities are endless coming to this form of getting access to games. However the thing missing will still be the need for that extra content, either if its in game or some other stuff that brings value and passion to the gamer. It’s a generation question also of course, like how you grew up with video games etc.

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Appendix 3: Customer scripts

Respondent no. 1

Date: 16.04.2020 Time: 45min Name of the interviewee : Anonymous

Age: 45 Sex: Male Nationality (Optional): Swedish

Control questions:

1. Do you play any kind of video game? A: Yes 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: Mostly adventure/action games but occasionally also puzzles/quiz-type games. I usually play on platforms like console (XBOX), and tablet (Ipad) 3. How often do you play? A: Every week

Questions connected to retailing business model: 4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/Appstore? Why? A: Both... I buy console games mostly in stores and download mobile games from Appstore that's the only option. To some extent a physical media (i.e. disc) feels more “real”, so that would be the preference, although that is only applicable to some platforms….not mobile games. But I would still argue that pricing is a major factor. If the product is cheaper as a “download” I would choose that option. The physical stores that offer games are decreasing. So, I would argue that the average customer looks online first and tries to find it either in E- stores for physical copy or in the app-stores for digital copy before even looking in the local retail stores. 5. Does the store interface/design impact your decision to buy/download games? In what way? A: No, not that much. Usually the games purchased/downloaded are often decided before visiting the physical store or browsing Appstore. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? (a): A: Maybe to some extent, but the main factor would still be pricing. (b): I would say that campaigns/discounts would be the most appealing factor. 7. How does customer reviews impact your choice of retailer for games? Why? A: When it comes to video games, I don't feel like the customer reviews of the actual/physical store is that important. I have often made up my mind of what I want to buy long before even going to the store. If I were to buy something more complex like electrical, with moving parts, that comes with a warranty, I would choose the retailer with more care, i.e. looking at customer reviews online. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: No, unfortunately I don’t.

9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: I prefer physical copies, but I consider buying digital versions if the price is better/lower. Digital accounts with online purchases can get hacked or corrupt for instance. You can always

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“start-over” with a physical copy. But in some cases, physical copies are not available like mobile platforms etc.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: In general, I would say no in the case of 5 years. There might be a small market for “legacy platforms” but the main channel for games will be through “digital channels”. In 10 years – all will be digital. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers?

A: Well, it doesn’t really matter that much to me where I buy the game from….physical store, online store, or app-store. I would never go to the mall only to buy a video game, I would have to have other errands or business there as well and I would still compare the price with the “online-competition” before I made a purchase. I’m convinced that the digital platforms will inevitably be the “death” of the retailers. I think that the “click-and-mortar” retailers might be able to be around for a few more years, especially as they can offer physical peripherals, like consoles, controllers like wheels, joysticks, game chairs and sell games as a complement. The benefit of being able to “try out” and “get a feeling” for a new physical accessory for your gaming rig is still a factor that benefits the click and mortar retailers. 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: I think I talked about it earlier….nothing else to add. 13. Any thoughts about Google Stadia and its future? Is this a service you would use

A: I’m interested in the concept, but I think it will require very fast and reliable internet connection in order to deliver a satisfactory experience. But sure, if the game is not relying on fast reaction times and frame rate update, I can imagine that it could be a competitor with “locally hosted games” on a console. I would consider trying it in the future, but for now I don’t really see the need for it.

Respondent no. 2

Date: 29.04.2020 Time: 18min Name of the interviewee: Anonymous Age: 37 Sex: Male Nationality (Optional): Swedish

Control questions: 1. Do you play any kind of video game? A:Yes 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: Primarily PC 3. How often do you play? A:Every day

Questions connected to retailing business model: 4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/Appstore? Why? A: Download via steam. Convenience mostly, the steam platform is convenient and keeps track of all games I own for future use also on other devices. Price has an effect certainly, but I search for the game I want, not necessarily the store. I make sure any place I buy from offers a steam key so I can get it into my library. 5. Does the store interface/design impact your decision to buy/download games? In what way? A:Yes to some extent... The library functionality is great on steam.

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6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? A:I don’t use retail stores. 7. How does customer reviews impact your choice of retailer for games? Why? A: Basically nothing. The games of my preference are typically not the ones popular with the broadest user groups. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: No 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: Digital, convenient library storage with Steam.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: 5 years is a short time, probably yes. For a long time after that, probably only connected to “collector’s edition” style offers. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? A: No….have no idea about it! 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: Payment models based on paying full cost before trying the game is kind of discouraging. Such games have limited incentive to be enjoyable for long. I typically prefer to know a game has long term appeal before paying full price for a single game, alternatively acquire it as part of a low-price bundle and hope there’s something interesting in there. 13. Any thoughts about Google Stadia and its future? Is this a service you would use? A: I am avoiding google products due to their tracking of users.

Respondent no. 3

Date: 07.05.2020 Time: 35min Name of the interviewee : Anonymous Age: 34 Sex: Male Nationality (Optional): Swedish

Control questions:

1. Do you play any kind of video game? A: Yes, but seldom 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: 30 % on Console (Nintendo Switch) and 70 % on Iphone / Ipad 3. How often do you play? A: Roughly 1-2hrs per month

Questions connected to retailing business model:

4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/Appstore? Why? A: The few games I have bought for my Nintendo Switch have been both as hardware from either a physical store or from an online store. I have also bought non-physical download- versions online. The games on my Iphone/Ipad consists of 95 % of “free download” versions and 5 % purchased versions, downloaded at Appstore. For games specifically – online stores are much preferred. My only reason to buy at a retailer would be to either check out the

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physical appearance or “look and feel” of the product. A video game is digital – it doesn´t matter how the physical appearance is! Or if the design of the physical store would look very attractive and draw my attention ….not very likely. Once again – price is the main driver for decision. If I find the price to be lower in a physical store, I will buy it there. However, online stores are normally cheaper. 5. Does the store interface/design impact your decision to buy/download games? In what way? A: I normally buy what I want – but to the best possible price, independent from store design. However, the user-friendliness & professional look of e.g. the online store, may ease the decision-making process. If I feel trust to the home page – It will support the decision. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? (a) A larger product assortment may ease the decision to buy a product at that specific store, but the price is normally more important. (b) A wide variety of product offerings may lead to more time spent in that specific store. More time spent may result in higher engagement and higher willingness to decide to buy. 7. How does customer reviews impact your choice of retailer for games? Why? A: It will influence quite a lot, especially for an online store where a lot of scams can take place and where it is more demanding to put a claim to, if the product is not satisfying. If customer reviews show a general low rating,I will probably not buy from that store. If customer reviews show a high ranking and the product has the right price,it will affect my decision. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: Normally not. 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: Up til now – I have preferred physical copies when possible. It feels more reliable if you have a hardcopy in your hand and not a digital version which can suddenly be hacked or disappear somewhere within the clouds. However, I´m more and more feeling the trust of digital copies, which can be beneficial when e.g. travelling – they are always in your device.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: It will be heavily reduced as soon as there's a strong guarantee that the digital versions are sustainable and safe. However, it must be assured that the customer also has a 2nd hand sales opportunity. Normally digital versions are considered as “personal” and connected to a specific user account. Physical copies can be sold 2nd hand. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? A: No, digital platforms will probably be more and more frequently used and physical retail stores will die over time. 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: No. 13. Any thoughts about Google Stadia and its future? Is this a service you would use? A: I have not been in touch with Google Stadia and cannot judge unfortunately.

Respondent no. 4

Date: 03.11.2020 Time: 33 min Name of the interviewee: Anonymous Age: 38 Sex: Male Nationality (Optional):

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Control questions:

1. Do you play any kind of video game? A: Of course, I do 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: Basically, I play all kinds of games, but I prefer adventure, sports and puzzle type games…...sometimes I even try sudoku. I play mainly on mobile (i-phone), but often I also play on PC for convenience. I play Pokémon Go, Poker and Sudoku on mobile and FIFA on PC. 3. How often do you play? A: Almost Every day

Questions connected to retailing business model:

4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/Appstore? Why? A: Most of the times I buy/download them from Appstore or website, because I can choose the games without any haste. If I want to buy any old game that I no longer find online, I go to physical store, mainly second-hand stores, because of their good collection of popular old games. I prefer online stores, there are certainly a lot of factors. For example, pricing and discounts, easier access to reviews from gamers, instant purchase without going to the store physically and so on. Though I admit that some very popular old games can only be found in physical shops, more specifically, in the second-hand shops. But from my experience, I can also add that the purchase decision for an adult and a child/youth varies significantly in compared to that of an adult. Unlike adults, children or youths prefer to go to retail shops to see the billboards and leaflets and other fascinating promotions in the store and they can also ask bunch of questions to the staffs there. 5. Does the store interface/design impact your decision to buy/download games? In what way? A: Yes, to some extent. Some stores have user friendly interface and great functionality to find out the specific game I want. Or, at least they recommend similar type games or most viewed or most downloaded games. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b) In what way does a retailer grab your attention through a variety of product offerings and incentives? (a) It’s true that a better product assortment is helpful for purchase decision, but I personally don’t think it has any crucial impact, not that much; (b) It’s true that if a retailer can offer a wide array of product offerings, I would spend more time scrolling down to see if there is anything interesting for me, but I would rather prefer if they could offer discounted prices, after all everyone likes discount 7. How does customer reviews impact your choice of retailer for games? Why? A: Customer review is very important, along side the price. I always check customer review before purchase, particularly a new game I never tried before. Sometimes the game trailer is super, but the game itself does not worth that much rating. In that case, an honest review can save time and money. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: No 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: I normally prefer digital copies because of storing them and finding them at the right time. But sometimes I take the opportunity to buy physical copy of a game for two reasons: if I have already enjoyed it a lot and would like to save it for a pretty long time, or if I find a sudden discount on that game.

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General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: I think they would still be sold 5 years from now, but definitely with a decreasing trend, but 10 years: I don’t think so. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? A: No, usually I don’t, only to buy videogames. But, if I go to a , where there is a videogame shop, I might go there to look over if there is something new and exciting. I think many people do not prefer to go to a physical shop, as digital platforms are enough nowadays and offer a wide range of products with a better price than the physical stores. 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: Sorry, I do not.

13. Any thoughts about Google Stadia and its future? Is this a service you would use?

A: I think stadia would ultimately grab a good portion of the gamers who do not bother to subscribe to an portal. But I personally have no interest and do not want to subscribe to google for their user tracking policy.

Respondent no. 5

Date: 27.04.2020 Time: 22 min Name of the interviewee: Anonymous Age: 29 Sex: Male Nationality(Optional): Swedish

Control questions: 1. Do you play any kind of video game? A: Yes absolutely, both PC and console. 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: PC and Xbox, type of games is kind of mixed, partly role playing games (RPG) and also some FPS shooters such as PUBG but not Fortnite it is more for young people. Q: Any mobile games at all? A: No, none of that shit haha. 3. How often do you play? A: A few hours a day maybe but at least 1 hour I would say.

Questions connected to retailing business model: 4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/appstore? Why? A: I would say that I buy them digitally. Q: Such as Steam? A: Exactly, but when it comes to Xbox I usually buy physical copies that I order online instead of downloading them to the actual Xbox. Q: Why? A: Hm, I don’t know, good question. Q: No thoughts about why you download to PC but not for console? A: It might have something to do with that it is not that often that I buy games for console and when I see one I like I think that “this would be nice to have a physical copy of”. Q: PC is your primary platform of choice? A: Yes and otherwise I would just have too many discs. Q: Any favorite store you order discs from?

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A: No, I download most of my games from Steam and the physical I check where it is the cheapest like price runner and order from there. 5. Does the store interface/design impact your decision to buy/download games? In what way? A:Yes in a way, if it looks shady I become a bit suspicious and think “Will I lose my bank information here?”. I think it kind of happens subconsciously and I would rather stick with the ones I know rather than buying from a website that looks funny. Other than that not sure, since I don’t buy from the physical stores anymore I don’t really think about them. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives?

A: I don’t know, I am usually after specific games so it doesn’t matter if they have a lot of games as long as they have what I am looking for. I look for the cheapest one and don’t really care what else they have. Q: How do they grab your attention? A: Well Steam is very good at having all these different sales pretty often, summer sale, winter sale, blackfriday, but also all these random sales of different games where I often think that I should take the opportunity now that it is on sale. Which is also a bit stupid since I keep buying games that I often don’t even have time to play. Q: So you have a lot but play maybe 1 or 2? A: Yeah basically, it's a smart trick on their part. 7. How does customer reviews impact your choice of retailer for games? Why? A: Yeah it affects me a bit, you can see it pretty easily on places like price runner if people are happy or unhappy with their purchases. You mostly see reviews for the games which is nice with Steam and they are quite generous with their return policies giving you 2 hours to try out the game. So if affects me in a way since I see if people are happy or not but I don’t check reviews for the stores that often. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: No, I don’t, I generally don’t leave feedback, not even on games. Maybe if I am really unhappy or really satisfied with my purchase and want to share my thoughts. But even then that is mostly just to my friends when we talk about that kind of stuff. Q: You never leave for anyone else? A: No, I don't know why, it is just the way it is. 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: Like I said before it is first and foremost digital copies that I usually buy. Q: Why? A: Because it is simpler, I mean physical discs take up room, the cases, the discs and all of that kind of stuff. Q: do you have a disc drive on your PC? A: I do actually but that was not for the games, mostly programs or movies. It does not feel that important anymore like it used to. Everything is online, I don’t need to go and get discs anymore. Maybe old movies and games but other than that no.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: Yeah I think so, I think there is always going to be a need for physical, just holding something, collecting and stuff, having a large collection. I think digital is going to become bigger though in the future. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers?

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A: I don’t visit them that often, they are often more expensive and then you have to go there and so on. Maybe more when I was a kid. Q: How does this impact the stores? A: I think there is a negative side there where they lose customers and such. Is it not Game Stop who are closing their business or something? It is similar to the movie industry with everything going digital and places like Hemmakväll are selling everything except movies nowadays, they sell candy and sodas instead. 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: More questions about what would happen in the future if Steam closed and what would happen to all my games and such. Where do they go? Do they just disappear? If all their servers go down is that it? All of my money down the drain. You can never really remove a game if you download it because then it is gone for good. 13. Any thoughts about Google Stadia and its future? Is this a service you would use? A: I feel like that has already gone to shit, I don’t really see a future in it, maybe if it was done differently. Q: Is the idea good? A: The idea is good, to be able to play even without good gear is pretty nice but maybe not that realistic and practical with different internet speeds and so on, you can’t really be playing in 4k all the time. It might come back in the future or a better alternative but I don’t know. Q: Something you would try? A: Maybe but at the same time it is nice to have gear of your own that you can use. Xbox and Playstation both have some type of subscription services where you pay and play a new set of games every month or week which is pretty nice when you want to try out new games.

Respondent no. 6

Date; 27.04.2020 Time: 16 min Name of the interviewee: Anonymous Age: 23 Sex: Female Nationality(Optional): Swedish

Control questions:

1. Do you play any kind of video game? A: Yes I do. 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: I play pokemon and Wizards unite on mobile and Sims on PC. I tried playing WOW once a while ago. Two of them are like I said mobile games that use AR technology where you go outside and move your phone around to find stuff. Somehow, they are connected to google maps and you get it on your phone as an interactive world. 3. How often do you play? A: The mobile games I play everyday Q: Even the once where you have to go outside? A: Yes, and Sims I don’t play that often, it is more when I feel like it and have time.

Questions connected to retailing business model: 4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/appstore? Why? A: The mobile games I get from the google play store on the phone that I download, it is the only place to get them. Sims I have either bought as a disc when that was popular or downloaded but I don’t think I went to a physical store when I did that, I think I ordered it from CDON. And more recently I just downloaded it from Origin, it is the only place that has it digitally. Q: So you mostly download?

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A: Yeah, it is more convenient nowadays and I don’t have to deal with discs. 5. Does the store interface/design impact your decision to buy/download games? In what way? A: No I don’t think so, I mean when you buy something physical from a website you compare price and such if it is cheaper on CDON or Ginza or something. Design I don’t really think about at all, it is mostly price that I focus on. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? A: Since I don’t play that much that is not something I have thought about, had I played more it might have mattered more. Q: How do they grab your attention? A: Origin is very good at having a lot of sales on expansion packs for Sims and such, especially around holidays, like now you can download these expansions and get a 50% discount. When they know a lot of people are playing they time it saying “hey you know you can have all of these too right.” 7. How does customer reviews impact your choice of retailer for games? Why? A: Yeah that probably plays a bigger role actually, to me it plays a bigger role than design because you want to know that you are going to get your stuff and get service and so on. If I see one site with 5 stars and one with 2 then of course I pick the one with 5 stars even if it is a bit more expensive. Additionally, generally I don’t pick places to order from if they don’t have Klarna or some form of bill or service. Q: So not if they ask for your , what if CDON ask for your credit card or some other site you trust.? A: Well if it is a site that I have used before then I might consider paying with a card but I would rather pay later by invoice. Q: Done any in app purchases in Pokemon? A: Yes I have actually, but then that is connected via some google account and that in turn is connected to your card, so there I use my card 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: No I think I am one of those people that doesn’t do that. The dum thing is that I would rather leave feedback if I was unsatisfied rather than if I was happy. Q: Lets say a site did not have Klarna, would you leave feedback about that? A: No I would not I don’t think, I would just go to a website that does have instead, generally I don’t care about it. 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: I thought it was a little bit funny and I was a little hesitant when I downloaded Sims from Origin and thought to myself “This company might not be around in the future and what happens then with my copy of Sims?”. In situations like that it would have been nice to have a physical copy or something. I would like to have a guaranteed copy of the game downloaded on my computer as a file that I could move around however I want and not have it connected to my Origin account. General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: No, I don't think so actually. I had that problem when I was buying a new computer since most computers don’t have a disc drive anymore. If you want one it costs a lot, around like 1000 more just to have a disc drive. And if you want to have an external one for Mac that probably goes for like 5000 just for that. Q: So you think it is going to disappear, Why? A: I mean based on how technology has developed so far, based on music for example where it has gone from LP to CD to MP3 to now more streaming services. It would be pretty logical for other industries to follow the same pattern like the music and movie industry.

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11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? A: No I am just too comfortable and would rather just order my physical games online. Where I used to live was a bit hard to get to the stores even if you just lived a bit outside of town so then you have to take the bus to get there and that was kind of an obstacle. Many websites have free delivery so that is a reason too. Q: How do you think the physical stores are affected? A: Negatively, less customers definitely 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: I think they are definitely going to develop the technology a lot more such as AR so that you feel even more like you are in the game and in the game world. The technology might develop and give us holograms and stuff like that. 13. Any thoughts about Google Stadia and its future? Is this a service you would use?’ A: Don’t know what that is actually.

Respondent no. 7

Date: 28.04.2020 Time: 53 min Name of the interviewee: Anonymous Age: 24 Sex: Male Nationality(Optional): Swedish Time 53 min date 2020-04-28

Control questions: 1. Do you play any kind of video game? A: Yes I do 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: I primarily play on console, I don’t have a windows PC anymore but I did play some Heartstone yesterday on my Mac. I think I got my first Xbox around 2003 and since then I have been a faithful Xbox player and mostly played console games and only played PC every now and again. I have mostly played single player games with a lot of lore that you can dive into and have your own adventure like Halo for example and Skyrim. Other than that I often play games where the gameplay is fun and have interesting in game mechanics. 3. How often do you play? A: I play every now and again when I feel like it and have time in between studies.

Questions connected to retailing business model:

4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/appstore? Why? A: I have always bought physical copies, the past 5-7 years I bought them online and got them delivered home. Before that it was more of a thing to go to the store and get them. One time I was there at night to get it when it was released. But it has always been just to hold a physical copy, even though it might be more practical to have a digital copy like now when I play Xbox, it would not matter if the console broke since I had the copy. And physical copies are something I have always bought and will continue to buy as long as it is still possible. I like having my contracts on paper and my games on discs I guess. But I like going to the physical store simply because I don’t like ordering online that much. Q: Do you like collecting? A:No it is not that, it has been a long time since I thought in that way. Even though I don’t go to a store anymore I still enjoy the feeling when you get a text that your games has arrived and you go get it and can remove the plastic and open it up for the first time. That is something I think is pretty sad with the latest generation is that it takes a long time to install

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and it is not just putting it in your console and play anymore, now you have to wait for hours. The reason I prefer console is that it would take hours to install and such on PC and console was not like that. 5. Does the store interface/design impact your decision to buy/download games? In what way? A: Well no not really, but I think that is because I know exactly what I want when I am buying a game. Before I go on to a website like CDON I know exactly what I want like for example, Doom for Xbox and not a special edition, I just want the game and nothing else. When I started ordering online Ginza was a thing but CDON is now where I usually order from. CDONs webshop is simple, they have a good , they are clear with the specifications needed to play the game. That is not something you have to worry about right now as an Xbox player but I heard rumors about it being a thing for the new consoles which is what I hate with PC and made me worried for a while. But going back to the question as long as they have what I want the look of the website does not matter. At the same time it has to look trustworthy. When I know what I want I take a look at pricerunner to see which website has it for the lowest price. If I see one website where it is 40 kronor cheaper and CDON where it is just 30 cheaper I go to CDON just because I know them. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? A: Not really, if they have what I want then I buy it from them when it comes to games. I do not like to browse games that much. I get newsletters from CDON where they have discounts for games and then it might be a game I have seen before that I just think might be nice to have, when I have time to play. Q: Is that how they grab your attention? A: Yeah the last Tombraider game I bought I did not buy when it came out but waited a few years later until I had time and it was discounted. But that was more because they had a discount on just the right game I was looking for, I usually don’t browse and if I don’t have time, even though it was discounted I might skip because I have other things to do. I talked about Halo before, which is only available on Xbox so when the new Xbox comes out I am going to buy one primarily to be able to play the new game. In this way assortment plays a role since I am just not able to get it anywhere else. But if I was to go into a store I would not browse, I would know what I want and get it, nothing else. Because when looking around the store and seeing a game that is cheap and cool looking you are most often guaranteed to come home with a shit game. So I would rather do my research beforehand and spend more. 7. How does customer reviews impact your choice of retailer for games? Why? A: Yes actually, I had a problem a long time ago buying a from a store and I checked it out online to see if they were reliable. There I saw many bad reviews about technical issues that they did not want to take care of. Had I read those before I would just have ordered a similar computer from a different store. The thing was that you could pick the parts you wanted and that was also the case for Inet but they were a bit more expensive. Had I read the reviews I would have chosen Inet but when buying games I usually use CDON through pricerunner since they are usually a bit cheaper. If I would use a new service I would read reviews first or talk to friends about it. But generally I like going to the places that I know have good services and such. like checking out new games on Youtube to see what people think and if it seems interesting I give it a go so Customer reviews in that way affect me. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: From what I remember I have never left a review of feedback about that kind of stuff. But I have a feeling it would work in a way that I would not care if everything went well but if I was disappointed I would leave a bad review. For me to leave a good review a company would have to be extraordinary in their ways of doing business. 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why?

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A: Yes I do Q: So even though you can download them you want physical? A: Yes I do, I like having and holding it and not be worried if the Xbox break. But also I think it is because I know too little about the whole downloading part of the gaming industry and as long as I can buy a physical copy I am just not interested in downloading. I mean if I can download a game the night of release and play it that is pretty practical, but to me it doesn’t matter if I have to wait a few days for CDON to send it to me. Q: For some games you can download before it is released but not play until released. A: For a game that I was insanely interested in then I might do that but often enough you can wait and it is not a problem. It has to some extraordinary circumstances for me to not do like I always do and buying a physical copy. I have done the same thing since like 2010 and before I used to go to a store. Q. Why did you stop? A: Honestly I don’t know, there was a store close to where I went to school but not sure if it was because it turned into something different. Since I am pretty anti ordering online overall I am not sure why I switched, not even sure where I would go here in Växjö to buy a copy. I probably just got very familiar with CDON and thought it was convenient and just continued ordering.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: Hm maybe, in 5 years I think they will still be around but 10 years I don’t think so. But it is kind of like everything with the digital evolution if Xbox forced me to download then I would and I would learn how to do it. I would not make a big deal out of it because for the disc is not the important thing it is just the way that I am used to doing things and if they tell me to download then that is what I will do. But not in 10 years no but a few more years. However the next generation of consoles is what I think is going to be the last one with disc drives. Q: What about backwards compatibility? A: Yeah that would be a reason to still keep them around but the current and future games coming out I don’t think will be the ones keeping the disc alive. Q: Is it the developers you think who will affect this future? A: I think it is going to be the console makers who are going to control that. It is kind of like now then Microsoft tells the developers that “these are the specs of the Xbox and you will have to make games that work on this”. They control what they are making and if they say that you don’t have to make the game fit onto a disc anymore they make even bigger games and so I think companies like Microsoft are going to be the ones controlling the future. When it comes to PC with Steam taking over the whole process it is so simple to just download and people playing on PC have less motivation than a console player has to buy discs. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? A: Like I mentioned before I prefer ordering online when it comes to getting videogames for my console but I have nothing against going to a store. Regarding how they are affected, since I order online from other stores and not necessarily from GameStop or any of the other specialized gaming stores they suffer from less sales. Mediamarkt, Elgiganten and all of those other places who have physical stores where they sell electronics can also sell games. However I think that kind of selling games will die out too, the physical game store medium is dead as a concept. Which is a shame, there is a certain kind of nostalgia of going into a store. I remember ordering a game from their website to pick it up at the gaming store a long time ago. I think this was the first stepping stone to order online only and from different companies other than the specialized gaming stores. I don’t think the next generation of kids are going to be able to go to a store and talk to the guy behind the counter about games and that this concept is going to die out unfortunately. 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel?

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A: I think VR is going to be a bigger thing in the future. I saw some amazing gameplay of a new VR game and thought to myself “this is the future”, they had amazing solutions to previous problems that was now solved. Mobile games I think is still going to be for casual players, I mean my mother plays mobile games, which I also do sometimes. I play them very intensely for a week and then forget all about them and never play again. I think I will play VR in the future but that is probably 10 years away for them to achieve that right feeling of immersion. 13. Any thoughts about Google Stadia and its future? Is this a service you would use? A: I heard about it a while ago and thought it was interesting but was usure about the cost. It might be the new thing that Netflix is for movies and series while Stadia is how you get your games. But going from a one time payment for a game to subscriptions and all that I think is too early, or just implement it now and it will become big later. If it is a one time payment for games then that might be more attractive and subscription is only really interesting if they have a large library of games for you to try out. I am not paying a lot of money a month to not play AAA games, I don’t see that happening at all. Q: They have received criticism for not having enough games yet. A: Exactly, they don’t have that kind of stuff yet but maybe in 10 years, it is still to early to tell.

Respondent no. 8

Date: 26.03.2020 Time: 15 min Name of the interviewee : Anonymous Age: 21 Sex: Female Nationality(Optional): Swedish

Control questions: 1. Do you play any kind of video game? A: Yes mobile games 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: I play mobile games and Sims on the computer. 3. How often do you play? A: Everyday a few hours a day, maybe 1-2. Q: What do you play the most? A: Mobile games mostly and PC a few times a month.

Questions connected to retailing business model: 4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/appstore? Why? A: I download my games from google play and it is simply because I have an android phone and that is the only place to get them. 5. Does the store interface/design impact your decision to buy/download games? In what way? A: In a way yes. When you download a game it shows you similar games that you might like, so then I often download new games while I wait for the first one to download. So the design of Google play makes it so that I see a bunch of other relevant games that makes me interested in downloading them. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? A: Well yes if the store doesn’t have any interesting games I want to download or buy then I would just not download, Pc or mobile. Q: What about grabbing your attention?

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A: Well I mostly just play free games that have a lot of ads and stuff and that is a good way of getting my attention is to have ads about how to play the game. If they have good and funny ads I tend to download the game. Q: So if you see an ad you often download a game? A:Yeah Q: Are they in other game? A: Yeah I often see them inside other free games that I have downloaded and on social media but I don’t think there is that kind of ads in the google play store. 7. How does customer reviews impact your choice of retailer for games? Why?

A:I never read any reviews about the stores or games I download. The reviews don't matter to me, I download what I want from where I want and it is only if I am suspicious that I would check. I can just not be bothered to and even if reviews are bad I might have a good experience even if they didn’t. The reviews have no value for me and since I don’t buy games for money there is no risk. Q: What about stuff for the Sims? A: No I would not read those reviews either, they don’t matter to me or reviews about the store. Q: So you do not read reviews overall? A: No, I barely read reviews for . I want to create my own opinion of things and do not care about others. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: No I always press “not now” if it pops up asking for feedback or my opinion about the store or games. I only leave feedback in stores if they have those smiley faces that you can press by the door. 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: Yes I do, I like having a disc. For mobile that is not possible but for PC I prefer disc. Q:Why? A: Nostalgia mostly. Only kids play videogames and when I was a kid I put in CDs in the computer to play. It is not as much the feeling of having a game but putting it in is sort of satisfying and nostalgic.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: No Q: Not even 5 years? A: No, I think it is going to disappear. I am the only one who does it due to nostalgia Q: So you think no one else is going to be nostalgic and have physical games? A: Exactly. There is going to be collectors and stuff like that but not new stuff. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? A: No, I prefer being home online and order a disc if that is what I want, I would never go to a store anymore. Q: How are the stores affected do you think? A: Negatively, I think a lot of people are like me that simply order from home and avoid meeting people having to talk to people asking 1000 questions and just order online instead because it is simpler. Q: So people won’t go there because it is easier to do it from home? A: Yeah basically. 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel?

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A: I think it is going to continue the ways things work now, people are still going to play PC, console, mobile like they used to do. Q: Do you think better phones will effect the market. A: No I mean how much better can they become that impacts games. I see a difference from my first phone that had one boring game but after that they have kind of not changed that much in my opinion. 13. Any thoughts about Google Stadia and its future? Is this a service you would use? A: Huh? Don’t know what that is. Q: (Gives short explanation) A: Maybe, I would not use it but probably a lot of young people.

Respondent no. 9

Date: 27.04.2020 Time: 46 min Name of the interviewee : Anonymous Age: 24 Sex: Male Nationality(Optional): Swedish

Control questions: 1. Do you play any kind of video game? A: I do yes. 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: I play Xbox and for a while I played a lot of Solitaire on mobile. I primarily play PC and Xbox I only really play the games that I cannot find on PC such as Skate and NHL. I kind of use my PC as a console and play with a controller nowadays, connect it to the TV and play PC on that. 3. How often do you play? A: Right now I don’t play that much, maybe 3-4 times a week just for a bit. I played more before but I have been at the office a lot the past months so I have not had time. Last time I played was about a month ago as opposed to everyday before.

Questions connected to retailing business model: 4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/appstore? Why? A:It is pretty much Steam that I use when I download games, store, on Xbox I haven’t bought any digital. I can’t remember the last time I bought a physical copy of a game, oh wait yeah it was Guitar hero 3, again since I wanted it for my Xbox 360 because the disc I had broke. But I bought it online on Amazon so not in a regular store, maybe NHL. PC discs was a long time ago, like 15 years or maybe Sims city now that I think about it. Q: Is it more convenient to order online? A: Yeah I mean if you are going to play anything multiplayer you basically have to use Steam. Steam is the fastest place to download, easy way of paying and is nice overall except the overwhelming amount of weird games on that platform. I use them because they are the biggest and that is not because they were the first ones but because they are good at what they do. It is kind of funny going past a GameStop these days, there are barely any games! There are only toys and stuff. But even old games are available online now so there is no need to visit a store anymore, there is a reason disc drives are not really standard for computers anymore. 5. Does the store interface/design impact your decision to buy/download games? In what way? A: Yeah it does, mostly because there are a lot of shady websites and if you see a strange website always having huge discounts you might think twice about buying any games from it. Although Steam has a lot of sales everyday with 80% or more they feel more reliable. I bought games on Epic games a while ago, but that was solely because they have exclusives

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like Heavy rain and Detroit and beyond two souls. They have had offers like that for a while so I have created a pretty sizable catalog of games on their platform. Q: So you have heard nice things about Epic and decided to use it? A: No I have actually only heard shady stuff about Epic, the owners are kind of shady and the future of the site is kind of uncertain. They have kind of shady practises and I don’t think they tell developers that they sometimes hand out games for free, I don’t know they are just weird about stuff. But Epic games is not really a big retailer of games, I don’t know anyone who uses Epic games really, it is only people playing Fortnite. People got upset because they released the new Borderlands game first of their platform but I didn’t really care, just download a new launcher it is that easy. Rockstars launcher however is the worst, I got it when they released Red dead 2 but is sucks and I sat in support for 6 hours without them being able to fix a problem I had. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? A: If I want a game and I can find it on Steam then that is where I will buy it, even if I find it on other platforms and even if it is cheaper on other platforms. I do this because I have all of my games on Steam already and I love having all of them in one place. However if there are games that only exist on let's say the Xbox then I might buy it there, but at the moment I can’t really afford to be buying a bunch of games anymore so I stick to the cheaper sites like Steam. Q: How do they grab your attention? A: To me a big thing especially for Steam is their “What’s new” that pops up when you start Steam where you can see all the discounted games. I usually scroll through that age to see what is new and a few times I have seen a game because of this and bought it. Other than that it is their frontpage when you start Steam and they have a recommended list based on the games you have where I sometimes find new games to buy. A lot of times I add games to my wishlist and later get a notification that it is on sale and buy it then. 7. How does customer reviews impact your choice of retailer for games? Why? A: Reviews to me matter more about the products rather than about the places you buy them from. But if there are no reviews about a site and you have never heard a good or bad thing about it then I am not going to be the first one to try it out. I mean was a website that was too good to be true at first so I was not too eager to try it in the beginning. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: No I don’t. I talk about websites and platforms with friends but I never leave any written reviews about websites or stores to others outside my circle of friends. 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: first of all don’t even think the make physical PC games anymore and PC games take up so much data I am not sure they would fit on a disc. I know Xbox and have discs but the most annoying thing with Xbox is that mine is just 500 gb, mine basically fit 3-4 games. Halo is like 150 gb on its own, I have to uninstall to fit more games and even then I need the bloody disc to play the game with its license codes on it. I would much rather just put the disc in once and then not having to use it again and for the Xbox to remember I have the game.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: Not for games no. There will be games for the old consoles but not for new games, I don’t think so really, I mean who is going to sell them? Amazon maybe. I think only Nintendo games will still be popular in physical form, for some reason people still like putting those SD cards in to play their games, probably nostalgia. Why not download I say? They did not have that feature when they released their new console and I dont get why not.

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11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? A: I don’t even know what store to go to really to get a physical copy of a game. Maybe for the new Halo games I would go to a store just because I have all the other ones but I don’t know. Q: How are the stores affected? A: They suffer definitely from all of this and there have been a number of stores closing down like Game and more recently GameStop because of a lack of customers coming to their stores. 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: I don’t know I feel so old looking at what new games are out there and I am not liking the new trends of Fortnite games, played it once and then left right away. Q: Mobile games? A: Mobile games are just after profit, I don’t think there is one that has a decent story or gameplay that they want to tell. The only mobile game I have played that was like that was the Room that has some atmosphere. Mobile games are just “quick cash grab” that are fast to develop and that have crappy models and full of with low effort. That made me quit another game I played a lot that had events every single week that forced you back in. But I decided enough was enough and I quit the game since I could not be bothered and did not like them trying to keep you coming back and luring you in. Mobile games does this to by having timers for things making you come back later when you have more lives or whatever or buy more lives to play. Nowadays I only play story based games because I am sick of the money making tactics and stuff. 13. Any thoughts about Google Stadia and its future? Is this a service you would use? A: I don’t believe in this service at all, I think they are way too soon with this kind of stuff and the tests I have seen are not impressive. I was lag, poor resolution and a crappy controller, I don’t get why companies just can’t buy licencing for Microsoft's controller. Q: Something you would try? A: not at the moment no, I have a computer that can handle the current games and will have one in the future so I don’t need live steam games. It is probably going to be interesting for a lot of people and I am not saying they should not develop it but right now I think they are getting ahead of themselves for what they can do and deliver right now. Internet providers need to step up their game to make this work because if you don’t have good internet speeds you are going to have a hard time using Stadia.

Respondent no. 10

Date: 27.04.2020 Time: 44 min Name of the interviewee : Anonymous Age: 26 Sex: Male Nationality(Optional): Swedish

Control questions:

1. Do you play any kind of video game? A: I do. 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: I only play PC, I have a PS3 but I only use that to watch movies and stuff. When I play some games I like to connect my PC to the TV and play on that instead of my console since it is so slow. 3. How often do you play? A: Everyday basically.

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Questions connected to retailing business model: 4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/appstore? Why? A:I mostly play league of legends and that you download once and then it updates itself all the time so. Q: How about physical stores? A: I don’t remember the last time I bought a disc for a game, maybe one of the Battlefield games for PS3 but for PC that is a long time. I think I bought a PC Sims expansion on disc one time but again a long time ago. I played the Sims games a lot and Sims city but mostly actually Cityskylines, the Sims city game was not that good so Cityskylines took over. Discs overall however are pretty slow, it is probably faster to just download than to install from a disc. I don’t know the exact numbers but I think so. And also today you always have a day one patch to install so you have to download shit anyway. 5. Does the store interface/design impact your decision to buy/download games? In what way? A. I mean I only buy games on Steam so the design is not really something I think about, I only care about the games they have. Epic games is a platform that has a lot of games and sometimes free games but I haven’t downloaded it, there is just no need, sooner or later they end up on platforms I already have and use. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? A: No not really. Right now I only use Steam and if the game doesn’t exist on Steam I just don’t buy it. As long as it exist on Steam that works for me, I have no interest in having a bunch of different launchers/platforms with games. I mean sure I have Uplay but I never start a game from Uplay, I always start it from Steam and then it launches Uplay to play the game. Q: How do they grab your attention? A: Not sure really, I just use Steam either way. When finding new games I find them in other ways through websites and videos and if I find it interesting I have a look on Steam to see if they have it. I never really check Steam to see what is new so the ads there doesn’t really affect me. I might check for follow ups for games on Steam to see if new ones have come out. The wishlist is also a nice feature where you can add games you would like to buy in the future and it tells you if it is on sale. 7. How does customer reviews impact your choice of retailer for games? Why? A: Yeah I would say that it does. I don’t buy games from websites that look shady or that I hear or read negative things about. But again since I always use Steam and am happy with it, negative reviews would probably not matter to me, they have the game so I buy it. I use the sites I know but if I would consider a new site I might check for information first. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: No, never. I have never left any reviews about the sites or games. I generally am just at peace with what I get. If I was really unhappy I might leave a review but I have never had a bad enough experience for me to leave a negative review. I generally just talk to people about what I think, about games, platforms, I never write anything for other people to read. 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: I would actually like to have physical copies of certain games. Q: Why? A: It feels a lot more safe for me because then I actually have a copy of the game that is mine if the site closes down. Games that only are single player games where multiplayer does not play a role like City Skylines are ones that I would like to have as physical. But then you have the problem of them being on DVDs which do not have a lot of memory and are slow in general. If you made the physical medium better I would be more inclined to buy physical copies.

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Q: Do you care about collecting? A: No it is more about what happens if Steam goes under and I have all my games digitally through their service. I would not mind buying physical copies if they came in a better format like Blueray instead of stupid DVDs, like if you have to get 60 gb of data. It is so stupid to have simple DVDs. Basically if there are interesting single player games in a good format then I would be interested in physical copies.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: No I don’t, not even for the newer consoles. Online they might be sold in the future but not in any physical stores I don’t think. I don’t think there are going to be any physical stores around that sell physical games in 5 to 10 years, not even Mediamarkt will sell them, they will probably not have them. When I was there last time a long while ago there were not a lot of games there in the first place. They had a few shelves of games but that is not much to make you interested. Nintendo have their SD cards and those make way more sense to keep around for the same reason I mentioned before, they are a better form than DVDs and are faster and can hold more information. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? A: I am not sure but I would probably order online honestly if I bought a physical, I usually just download so. The stores however suffer because of this for sure and I don’t think they are going to be around for much longer. If people are not interested in your products anymore you have a problem.

12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: I think mobile games might be more of a thing in the future and Google Stadia even further in the future for it to be good. Once Phones become better you might even connect it to the TV and play a mobile game on that with a controller connected. 13. Any thoughts about Google Stadia and its future? Is this a service you would use? A: To play online over the cloud like this and streaming games is something I think will take a couple of more years to achieve, or maybe even 15 years or more for it to be done great. I think it would work better for games that do not require lightning fast speeds and don't demand too much from the hardware. Problem there is that then you can probably play it on the setup you have at home and the stuff that is heavy and requires a lot are probably going to be games where you do not want a lot of latency. Low passed story based games that you don’t care about latency you probably want to look nice instead and they can’t really deliver that yet with the internet speeds being what they are. I think it is more for casual players who play a game every now and again. You can’t use it to play online with all the latency, you can play story based games like Life is strange and Walking dead. If you only play like 2-3 games a year that are like that then Stadia makes more sense. Casual players don’t care about the latency that much and it will probably be cheaper not needing the hardware to play.

Respondent no. 11

Date: 28.04.2020 Time: 1h 3 min Name of the interviewee : Anonymous Age: 25 Sex: Male Nationality(Optional): Swedish

Control questions: 1. Do you play any kind of video game? A: Yes. 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)?

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A: I play on PC, Nintendo and mobile and mostly play survival, multiplayer and also shooter games plus some fantasy adventure games. I don’t play that much on my phone, I do it sometimes but I don’t play that often or for too long. 3. How often do you play? A: I would say I play about every day, it depends on the week and what I am doing but probably 4-5 days a week.

Questions connected to retailing business model: 4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/appstore? Why? A: The majority of the games I buy I get through Steam but also on the Nintendo Eshop. I have ordered games from gaming stores before but usually that has been for consoles like Nintendo Switch and a long time ago for PS4, but lately I have started to download those too. I have pretty much switched to downloading it is more convenient. If I buy and order online it is mostly from Webhallen and CDON but never GameStop and that type of specialized stores. Q: Why? A: They are so expensive there is the main reason. Spelbutiken.se, Webhallen and those types of store are the ones i use the most. Going to GameStop stopped being worth it a long time ago because their games are always overpriced with 200 kr more than other places. The nice thing I liked about physical stores is the fact you get the game right away in your hands, it was a fast way of getting it when you didn’t have an amazing internet connection. 5. Does the store interface/design impact your decision to buy/download games? In what way? A: For me it has mostly been about the places that have been the cheapest on pricerunner and I haven’t taken design and stuff in account. The G2play website is kind of weird and have a strange business plan where they buy Steam keys on sale in other countries and sell them on their website. It just feels and looks shady and so that plays a role definitely. I liked the store Game though that existed a long time ago, I had a nice customer experience there at one point although kind of weird where they tried really hard to sell more accessories to the games and tried seaming like a cool place to the point where they offered me candy. I think it was around the time when they were going through their bankruptcy and tried to get more customers and for them to come back and tell people how cool they were. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? A: Not sure, I used to go into GameStops to browse but never really bought any games. I went just because I liked to get an overview of what is out there but the assortment is only a thing I cared about when I was younger I guess. In terms of grabbing attention they had sales but I never really cared about GameStops sales since I just browsed and did not buy. I sort of only used it as a gallery for games. There is a bigger chance if I see a large variety of games to different platforms other than just Xbox that I would go inside and look. But in terms of sales it did not matter to me what they did, I wasn’t buying it. Q: How do they grab your attention? A: The Steam frontpage and the “what’s new” window that pops up with sales is something I always scroll through and if I see something I have thought about buying before or if it is really cheap I might take the opportunity to buy a game.I often check the Nintendo specials when I am on that platform to see if they have anything interesting. 7. How does customer reviews impact your choice of retailer for games? Why? A: I don’t really buy my games from shady sites or places and there are not that many places I buy from. I use Steam and Origin but I never check reviews about them. I have used Good old games for something but I don’t use a lot of different places. I bet there is a group of people hating Steam but I am fine with it so I don’t care. What I can say is that sometimes when I am on pricerunner looking for a game and the top cheapest choice is a store or website I know nothing about that have bad reviews or none at all I never go for that one and pick another instead.

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8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: I have never left a review at all. 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: I am not sure. It is one thing to have physical copies for your consoles but for PC, never, there is just no point. I don’t even have a disc drive for my computer and downloading is just a lot easier. It might be fun with some special editions sometimes. I sometimes think about when I pack up my PS4 and the next generations of consoles have come out, if I ever bring the PS4 out again to play it is going to be the physical games that I packed with it that I will play. Maybe the games on the harddrives but I will probably not be able to download games that I removed to get more space. I did buy a disc for PC once because it was cheaper but now I can’t use it and it is just taking up space so dsics I would only consider for console. Nostalgia is a big thing as well for having physical copies, especially if it was a game you played a lot. Borrowing and playing with other people is also a reason I would have physical copies.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: No or maybe consoles actually might keep them around for a bit but who knows. I think it will go away but not in 5 years 10 maybe. For the next generation I think the physical will still be around. I think the generation of consoles that comes out in like 7 years will not have physical games anymore or at least not a disc drive, the future doesn’t look good for discs. I think they might release consoles that have disc drives and ones that does not, like “slim edition” or something that phase out the discs. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? A: No I don’t, I download most if not all of my games and for PC there is no reason to do otherwise. It is just simpler and faster. Q: How are physical stores affected? A: They are affected pretty badly by all of the people downloading games and such but they kind of brought it upon themselves with all the prices being what they are at like GameStop and similar places. They need to have something extra, a niche that makes them interesting, and just having games does not work if you don’t do it in a unique way. 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: I though mobile games would be a bigger thing already than it is and that it would take over console and PC a bit but that has really not happened. Mobile I think will get bigger and still be its own category and grab the more casual gamers. VR is something I think will be bigger in the future when that gets better. 13. Any thoughts about Google Stadia and its future? Is this a service you would use? A: I think it will have a future but I don’t like their business model. If I remember correctly you had to get a subscription and also buy the games separately on Stadia to be able to play and I don't like that. But the technology I think is interesting and I would love to give it a go to see it is as good as one can hope for. I like the Idea of having all games in one place and you can play wherever you are but there are other subscription services that have similar deals like Playstation now that is a streaming service of old PS games. I think the service that is going to win the streaming of games market is going to be the one with the best gaming library which is something Stadia does not have at the moment. If any company is going to be successful on the streaming of games market it is going to be a company that is already established on the games market like Microsoft or Nintendo. I think it might work somehow since streaming is pretty practical from a user point of view. We spend a lot of money on games and having a subscription service for it just makes sense.

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Respondent no. 12

Date: 28.04.2020 Time: 1h 12 min Name of the interviewee : Anonymous Age: 24 Sex: Male Nationality(Optional): Swedish

Control questions: 1. Do you play any kind of video game? A: Yes I do 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: Right now I would say I play PC, Nintendo Switch and mobile. I mostly play multiplayer games, adventure games and building games for PC, plus strategy games and sort of the same for Nintendo. 3. How often do you play? A: Every day basically and around 4-5 hours a day probably with friends. I might play smaller games on my phone while doing other stuff.

Questions connected to retailing business model: 4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/appstore? Why? A: I download most of my games from places like the Google play store, Steam, the developer websites, going right to the source you know. Sometimes from Webhallen when it comes to physical console games which I will order from soon actually. Sometimes you can find obscure games on websites where you don’t have to spend a lot of money but never from like GameStop,they are just too expensive. CDON is a site I have had many issues with and so I stopped ordering from them. When I was a kid I liked going to the stores more to check out what new games were available for Nintendo and the used games shelf and find something good there. 5. Does the store interface/design impact your decision to buy/download games? In what way? A: I mean when you download games there is the “shady” factor to consider when browsing websites. Websites like G2play have Steam keys for games that don't always have all the stuff and some are from Russia or something and different languages and you kind of have to decide if it is worth trying out. You always have in the back of your mind that you will lose your card information. When Game and GameStop were still open I would rather go to Game because GameStop had more of a “F**k yeah shooter yeah yeah videogames! Yeah!” style in their stores, while Game was pretty chill and more relaxed. The atmosphere of Game was different and more pleasant, not as hyped. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? A: I would say that it does, for both digital stores and physical . It mattered more when I was younger going into a store, the gaming stores usually had more than other stores selling games. The specialized stores often had special editions that I was interested in and places like Elgiganten did not so in that way the assortment mattered from store to store. Price is however the major thing, I don’t think I have ever had a problem choosing where to buy a new game because the answer has always been the cheapest place. Q: How do they grab your attention? A: With Steam I like checking out the special offers to see what they have, I often otherwise get games recommended to me by friends. The recommended games I often wait to buy since I am not sure, and if I see it on sale I buy them to see how they are and think I might as well buy them now when they are on sale to play with my friends. But whenever I feel like getting a new game I always go to the games on sale since I don’t want to pay full price. 7. How does customer reviews impact your choice of retailer for games? Why?

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A: If I feel like the site is shady then yes the reviews matter a lot. I generally don’t trust the cheapest places that you see on websites like on pricerunner and if they have no reviews I would just not use them. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: I never really leave reviews. I left one once on Youtube and that is it. Mobile games is the only place where I rate or leave reviews and that is only to get rewards and never for the actual store itself. 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: I buy physical for my consoles and other smaller devices because it is nice but I download for PC. I have a bunch of discs that I haven’t opened yet so I don’t feel like getting more but being able to bring them with you to places is nice. But yeah why is more because I don’t need physical anymore and I have no way of using them for PC.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: Good question, maybe. From an environmental point of view it would be nice for all of them to be digital because you use a lot of material to make all those discs and covers around the world and the material has to come from somewhere and that costs money. There are a lot of examples of how the discs are already being phased out where you can get a box with accessories and shit that you usually get but the game itself you just get a digital code for that you can cash in on Steam of someplace. Nintendo have done retro things for NES classic where you get a physical console that they have put a bunch of old digital games on that you plug into your computer to play like it were an old console. But I think they are doing to much of compromises and that it will be phased out eventually. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? A: I download basically everything and I don’t visit any stores anymore. I play PC primarily and don’t need discs for that since I have Steam. Q: How are the physical stores affected? A: My first thought is “what stores still sell physical games?” which kind of says it all. I think it hurts them, a lot ordering online and downloading instead of getting from the more specialised stores but right now I don't even know which ones are left? I do however think that there are opportunities for specialised gaming stores to have places like board game cafes but for video games where you come in and play and even buy a game to take home. They have an cafe in Malmö somewhere which is pretty cool so something like that but for games would be cool. 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: I think mobile will still be its own thing for a while longer. I mean there are a bunch of good games for mobile that you can buy that are full RPG games but you don’t. You don’t sit down and dive deep into a mobile game. I have started to get emulators for old Gameboy games and stuff for my phone since there is no other way of playing some games and I think mobile can keep some old games alive in the future. I think they will still keep crossing the lines between gaming and gambling which is kind of not cool. Mobile games are for and will probably continue to be for casual gamers since it is so easy to get access to games on mobile and they don’t require a lot of effort. 13. Any thoughts about Google Stadia and its future? Is this a service you would use? A: It is a cool service but not something I think I would try just yet, maybe in the future if it got more popular and had a better game library but for now I will stick with what works for me.

Respondent no.13

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Date: 28.04.2020 Time: 1h 5 min Name of the interviewee : Anonymous Age: 24 Sex: Male Nationality(Optional): Swedish

Control questions: 1. Do you play any kind of video game? A:Yes I do 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: I only play games such as FIFA and NHL och playstation. I sometimes try out the games I get through playstation plus that are free. I keep myself to games where I can stop after 20 minutes, I like to only play a match such as in and Battlefield. When I play those games I can play 1-2 matches and stop but playing a history or story game I get stuck for longer. 3. How often do you play? A: Well now I have been at home for about 6 week but usually I am spending a lot of time going back and forward to work. Usually I don’t play that much on weekdays so it is a match sometimes and a bit more on weekends, like 2 hours.

Questions connected to retailing business model: 4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/appstore? Why? A:I download from the Playstation store, I don’t have any physical copies of any of my playstation games since like 2-3 years back. Before I spent time with that kind of stuff but I mean it costs to get the game to the store and for me to get to the store, buy it and get home. The cost difference of all that is so small that it is pretty nice to not have to wait for a few days for the game and not having to go to a store, and the fact that I can basically play it right away is just better. One thing however is the memory capacity of the console, they don’t have that much so you can’t really have that many games on it if they all are 50 gb or more. I have had to uninstall old games just to install new ones because the consoles do not have enough memory and the games you buy or download are just too big, sometimes over 100 gb. Q: Did you use to go to physical stores? A: I used to go to Mediamarkt since at least they used to be among the cheaper stores when it came to buying games. I checked a few days ago and saw that since 2018 all my games have been bought and downloaded online, I think I just stopped caring that it might be a bit more expensive on the playstation store sometimes. They have sales and stuff like that as well so that is a factor but I haven’t been in a physical store for a long time so I don’t know what the situation is like.

5. Does the store interface/design impact your decision to buy/download games? In what way? A: I have the playstations as my console so I don’t have a choice when i download and I don’t feel the need to play on my PC along with the fact that I probably need a new one. I can’t say that I thought much about design before either, I just went to Media Markt to buy my games because of the price. If I wanted a physical game I went there and didn’t care much about other things. You can just go in, grab what you want, go to the register and then you are done. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? A: It used to but now I download from one place so I don’t think about it. Q: How about grabbing your attention? A: I mean they send you questions like “do you want to download this game?” which I have already paid for with PlayStation plus. But I already have all the games I need so I don’t really bite but sometimes I do just because I can. But I don’t go in and browse the new stuff

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or what is on sale since I am not interested. I care more about getting good at what I have than getting more games. 7. How does customer reviews impact your choice of retailer for games? Why? A: If I would buy from a website or store I don’t know then I might feel more cautious but again since I use PlayStation store I don’t have a choice of retailer. You don’t want to lose all your card info so you have to be careful sometimes. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: I never really get a question to leave reviews from PlayStation and I don’t go out of my way to leave one. 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why? A: The purpose I see for getting physical is more to have all the games from a series like NHL on a row but I also feel stupid having physical copies when I can buy them digitally. I think it would have mattered more if I had more friends interested in playing the same game on the same console with me. Then a physical copy might be nice to have and bring to other peoples houses to hang out and play together. Bringing all your games together and play a bunch of different games and all you need is to bring your disc is a nice thing to be able to do. I have however become accustomed to downloading for reasons I mentioned before with it being cheaper, easy and convenient staying home and just downloading.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: The biggest games that have or will get retro status will still be around I think but for newer games after that I am not sure. I think it will still be made for games like since it has high status. I think it there will exist some kind of workaround since there are enough nerds out there wanting physical copies that there will be some external stuff. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers?

A: I like going to the stores for the people or at least I used to, now I download but would probably order if I would buy a physical copy. Q: How are the physical stores affected? A: Negatively I would say. I know for example at the Naturkompaniet that sell outdoor stuff that they are more expensive than most online places since they have store employees. But if you want there to be employees there to help you then maybe you are going to have to pay a bit extra. But it is really easy to just go in and check things out and then order the cheapest alternative. Problem there is that the experts may disappear, the people that actually know stuff. But I think it might be and age thing with wanting the cheapest place. I think the places aimed at children will still be in good shape since parents or grandparents go to the store to buy games for their kids. 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: VR is something that might be bigger but there you have to solve the problem of making it more available and affordable for the average consumer. 13. Any thoughts about Google Stadia and its future? Is this a service you would use? A: I am not sure, streaming services overall have problems with profitability because of all the licencing of movies and games since they also skip out on the advertisement money they would earn and having to pay extra for having exclusive rights to have specific games on their platform. For people having a high consumption of games much like Spotify is for people who listen to a lot of music subscription-based streaming for games make sense.

Respondent no. 14

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Date: 01.05.2020 Time: 54 min Name of the interviewee : Anonymous Age: 19 Sex: Male Nationality(Optional): Swedish

Control questions: 1. Do you play any kind of video game? A: I do. 2. What sort of video games do you play and on which platform (e.g. console, pc, mobile)? A: I mostly play PS4 and PS3, some PC and I mostly play RPG games, scary games and FPS games like Call of duty and battlefield. 3. How often do you play? A: I used to play everyday but now I play every now and again with friends on discord.

Questions connected to retailing business model: 4. How do you usually get access to the games you play? Do you buy them in a store or download them from a website/appstore? Why? A: When I started playing I downloaded games from Riotgames like LOL and Steam. But for PS3 and PS4 I have bought all of my games as physical copies both used and new ones in a store. But games I would by now for console I would by on PlayStation store and download since you don't have to care about the discs anymore and keeping them safe. Also, they would probably be very overpriced in stores like GameStop both used and new games. Every time I have been to a GameStop the prices have been crazy even for games that are a couple of years old. The main reason I did not download before was the bad internet connection we had at home growing up not enabling me to download games so I had to buy physical basically. 5. Does the store interface/design impact your decision to buy/download games? In what way? A: A bit, I liked GameStop a lot because of the stores and the people working there compared to the design of Steam. Steam looks so god damn boring, it is just like 50 shades of grey while the PlayStation store is colors and other stuff making it more interesting that make you want to buy. I have stopped buying from Steam really and don’t use it as much anymore. But yeah I like the stores to be visual and not just text and other boring stuff. 6. (a)Does the product assortment of a store impact your choice of retailer for games? (b)In what way does a retailer grab your attention through a variety of product offerings and incentives? A:Depends on the game I am buying, I mostly have a game in mind when going to a store or website. If they have the game new and another only have it used I will get the new one, so then it affects which store I buy from depending on what they have. But I don’t browse much, I know what I want and if they have that I don’t care about any of the other games. Q: How do they grab your attention? A: Steam have all their kind of sales all years round which can make me more interested in what is out there and if something is cheap then why not. I haven’t used the playstation store that much so i don’t know how they are with sales but GameStop when they were around never seemed to have sales or at least not ones worth having. I traded in some games there and got like nothing for it so I am not impressed with their offers regarding trading in games. 7. How does customer reviews impact your choice of retailer for games? Why? A: They don’t, I don’t read that kind of stuff and I just want to make my own opinion about stuff so I don’t care about reviews that people write. 8. Do you contribute to designing a better store atmosphere and product assortment in either click-and-mortar (combination of physical and online) or online retail store through any sort of feedback? How does it take place? A: Only if people ask about my opinion but I would never leave a comment on a webpage or anything like that. I have however emailed Steam and commented on their design, their page looks so dull and boring I don’t get it and they should modernize their Steam shop. 9. Do you prefer having physical copies of games or are you more accustomed to having digital ones? Why?

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A: If I find a game in Media Markt like Jedi fallen order, that is not a game I want digitally but a physical disc of so it depends on the game. I collect some good games on discs but I don’t order online, I buy them in a store since I don’t like to wait. The feeling of a new game in your hand and putting it in the first time is great. But a big problem is not having enough memory on my consoles to keep games installed, if I want new games I have to uninstall to get extra space. I do however like to download to skip having discs but memory is still a problem.

General questions 10. Do you think physical copies of games will be sold 5 years from now? 10 years? A: No I don’t and I think the games that I have are going to be nice to keep and might even increase in value if they become old classics. Everything is going digital and if you look at the music and movie industry you see the same thing happening. People are lazy and will just want to sit home and download games instead of buying actual discs. 11. Do you prefer to visit physical retail stores to buy video game copies? How do you think digital platforms are affecting click-and-mortar retailers? A: I think I will always go to the stores to buy physical games as long as there are places to buy them, or at least some of them, but I will probably still download games for PC. I think the stores will go under eventually because not enough people are going to the stores. They are just too expensive and the way they price their games is not attracting customers at all, I am not surprised they went under here in Sweden since they could not compete on pricewise. 12. Do you have anything more to tell us about the video game industry and its future within the context of digitalization of its distribution channel? A: I think more WII like controllers will be more of a thing and VR kind of devices that make you more emerged in the game. Esports with advanced VR could be cool but something a bit further in the future I think. I think backwards compatibility is going to become more popular because of people feeling nostalgic and wanting to play the good old games from when they were young. Mobile games are probably going to be more advanced since they are more casual and convenient that you can play at any time. 13. Any thoughts about Google Stadia and its future? Is this a service you would use? A: I don’t think that is something I would use, it feels unsafe somehow. I don’t think it will work for games, for movies sure but not for games. I want to own my games for real and play it on my equipment and not stream, I don’t trust it. If you can take it anywhere it might be a problem like Pokémon where people got run over because they looked down on their phones. Classrooms are going to be crazy with kids playing on their phones instead of listening to their teachers.

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