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Video Game Business Management Economics: Employing Industry-Level Data to Improve the Decision-Making Process

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Video Game Business Management Economics: Employing Industry-Level Data to Improve the Decision-Making Process 博士論文 Video Game Business Management Economics: Employing Industry-Level Data to Improve the Decision-Making Process BAILEY, Eric Nelson 主指導教員 宮田 一乘 北陸先端科学技術大学院大学 先端科学技術研究科 [知識科学] 令和 2 年 6 月 i Abstract Current research into video game business management is sparse. What research does exist focuses on the creative process of video game development; however the business side can longer be neglected, with individual game development project budgets in excess of US $100 million in some cases. Business management decisions are made by publishers and developers based on their tacit knowledge of what has worked in the past according to their experience; however, left unverified there is a risk that this tacit knowledge may not reflect rapidly changing market realities. Managerial economics is concerned with the optimization of the decision-making process given limited resources, and such a rational decision-making process is required if publishers and developers want to ensure that the knowledge their organizations contain best reflects the reality of the wider industry. Through this research, I will rely on a managerial economics perspective and use knowledge discovery in database (KDD) techniques to answer the following questions: MRQ: How can an economic perspective that views decision optimization in terms of making the best use of limited organizational resources allow for the use of data from the wider industry to question assumptions and improve video game business management decision processes? SRQ1: What is the state of intellectual property exploitation and exploration strategies in innovation and business management practices within leading video game organizations and how are those strategies changing? SRQ2: What role do women play in making creative decisions within video game development organizations and how does this compare to video game consumer demographics? SRQ3: How do the product scope decisions made in video game project management reflect what provides value to consumers? This research will propose a learning process tailored to a creative industry such as video game development as an answer to the major research question. Although tacit assumptions regarding how to best employ organizational resources are traditionally difficult to question because of the artistic or symbolic nature of the products of creative industries, a managerial economics perspective allows these assumptions to be questioned and tested in a rational manner. The proposed process incorporates data from the wider video game industry to falsify or validate assumptions behind management decisions. This approach will be applied in answering the three subsidiary research questions through quantitative research into the results of one strategic innovation management decision, one human resource or “talent management” decision, and two project management product scope decisions in the video game industry. The answers to these three research questions provide examples for how KDD techniques can contribute to improving decision-making within a creative industry such as video game development. The proposed learning cycle expands on the traditional “double-loop” learning cycle by incorporating two important steps: locating decisions based on tacit assumptions and framing questions to attempt to falsify those assumptions, and then employing KDD techniques with data from the wider video game industry falsify or validate the tacit assumptions behind those decisions. Keywords: video game development, cultural and creative industry management, business management, managerial economics, knowledge discovery in databases ii Preface I hereby submit this dissertation in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Knowledge Science in the School of Knowledge Science at Japan Advanced Institute of Science and Technology (JAIST). The research described in this dissertation was conducted under the supervision of Professor Kazunori Miyata of the School of Knowledge Science at JAIST. Except where specific reference is made to the work of others, the contents of this dissertation are my own original work and have not been previously submitted for any other degree. In cases where the papers referenced as chapter material include collaborators, I was the primary researcher, responsible for concept formation, data collection, analysis, and manuscript edits, and corresponding author for publication or presenter in the case of oral or poster presentations. A version of Chapter 5 is currently submitted for publishing consideration in an academic journal as Bailey, M., Miyata, K. (in review). Exploration and exploitation in video game development: An analysis of the shift in innovation trends in third-party console game publishers. A version of Chapter 6 has been published as Bailey, E., Miyata, K., and Yoshida, T. 2019. Gender composition of teams and studios in video game development. Games and Culture, doi: 10.1177/1555412019868381. A version of Chapter 7 has been published as Bailey, E., and Miyata, K. 2019. Improving video game project scope decisions with data: An analysis of achievements and game completion rates. Entertainment Computing Vol. 31, p. 100299, doi: 10.1016/j.entcom.2019.100299 and is based on an earlier poster presentation given at the 2017 International Conference on Entertainment Computing (ICEC). A version of Chapter 8 was published as Bailey, E.N. and Miyata, K., 2018. Estimating the Value of Multiplayer Modes in Video Games: An Analysis of Sales, Ratings, and Utilization Rates. 2018 IC3K/KDIR Proceedings (pp. 153-160). In the chapters based on papers, the use of pronouns “we” or “our” refers to myself and the above co-authors involved in the research. Eric Nelson Bailey, June 2020 iii Acknowledgements First, I would like to thank the Japan Advanced Institute of Science and Technology (JAIST) for providing a stimulating environment for investigating the business decision-making process in video game development. Through JAIST’s Knowledge Science curriculum and research program I was able to appreciate how important the knowledge that individuals and organizations hold is to shaping the reality frameworks through which all of their decisions are made. I extend my deepest respect and gratitude to Professor Kazunori Miyata, who supervised my research and provided me with the guidance I needed to proceed. Any time I had a question, it was soon answered, and the balance of freedom and instruction he lent helped me to grow as a researcher while managing family and work responsibilities. I would like to extend my gratitude to the evaluation committee, Professor Youji Kohda (JAIST), Professor Naoshi Uchihira (JAIST), Associate Professor Kunio Shirahada (JAIST), and Professor Tetsuhiko Yoshida (Institute for Advanced Sciences, Toagosei Co., Ltd.) for their invaluable insights regarding the presentation of my research, all of which helped me to clarify the content of this dissertation. My sincere thanks go again to Professor Tetsuhiko Yoshida of the Institute for Advanced Sciences, Toagosei Co., Ltd. for supervising my minor research and providing guidance regarding visualization techniques – the results of which contributed to the gender diversity analysis presented in this dissertation – and for the insight that connected my work with the existing field of managerial economics. My sincere gratitude also goes to Associate Professor Yasunobu Ito, who provided guidance in the ethnographic research that led to the discovery of livestreaming as an innovative method for user testing mentioned in this dissertation as a method for determining what provides value to video game players. Last, and certainly not least, I would like to thank my wife Nahoko, my sons Kian and Aidan, my daughter Sheena, and my parents Katherine, Kent, and Marge for their encouragement and endless patience as I pursued this research. Balancing research, work, and family would have been impossible without their support. iv Contents Preface .................................................................................................................................. iii Acknowledgements .............................................................................................................. iv List of Figures ........................................................................................................................ x List of Tables ...................................................................................................................... xiv List of Symbols ................................................................................................................... xvi List of Abbreviations ......................................................................................................... xvii Terminology ...................................................................................................................... xviii 1. Purpose and Significance of the Study....................................................................... 1 1.1 Motivation and Background .................................................................................... 4 1.2 Scope and Objectives ................................................................................................ 7 1.3 Overview of Dissertation .......................................................................................... 9 2. Video Game Development Background and Issues ................................................. 12 2.1
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