Available online at www.sciencedirect.com Expert Systems with Applications Expert Systems with Applications 36 (2009) 1816–1825 www.elsevier.com/locate/eswa An empirical analysis of online game service satisfaction and loyalty Hao-Erl Yang *, Chi-Chuan Wu, Kuang-Cheng Wang Department of Business Management, Tatung University, Taipei, Taiwan Abstract In this study, we argue that there will have some factors affecting online game service satisfaction and loyalty. The purpose of this study is to understand an online game service model. This model contains several dimensions including experiential value, transaction cost, and service quality, the three antecedents of online game service satisfaction and loyalty and test the associations among the con- structs in it. After surveying some players in Taiwan, we found that three antecedents have significant and positive effects on online game service satisfaction and which, in turn, significantly affect online loyalty. Especially, service quality has the relatively higher total positive effects on both online game satisfaction and loyalty. Meanwhile, online game satisfaction completely mediates the effects of these three antecedents on online loyalty. The findings imply that how to manage online game service quality better, provide more acceptable trans- action cost, and offer more experiential value are the key ways for effectively enhancing players’ satisfaction with the online game service in order to retain their loyalty to the online game service system. Because to keep competitiveness of online game industry is hard to hard, we hope this model can provide online game corporate to select and adopt the key point what the online game corporate should choose and how to affect the key factors of online game service satisfaction and online loyalty in online game industry. Ó 2007 Elsevier Ltd. All rights reserved. Keywords: Experiential value; Loyalty; Online game service; Satisfaction; Service quality; Transaction cost 1. Introduction providers entering the industry. The huge Internet users made the opportunity for the rise of online-only game com- According to a report from DFC Intelligence (2006) the panies to enter the online game industry and that are mak- worldwide online game market is forecasted to grow from ing the marketplace more competitive for established $3.4 billion dollars in 2005 to over $13 billion in 2011, indi- players (DFC Intelligence, 2006). How to retain the exist- cating that the potential increase of the number of online ing online game users and entice new ones have attracted game users. In the US, with multiplayer games being an both practitioners and academicians to pay more attention established factor in game market in 2004, the computer to it. and video game market exceeded $7.3 billion. This year The literatures revealed that the immediate factor affect- 42% of most frequent game players are playing online ing consumers to retain loyalty to the providers is customer (Dick, Wellnitz, & Wolf, 2005). In Taiwan a survey data satisfaction (Cronin, Brady, & Hult, 2000). Similarly, in a showed that the number of Internet subscribers in Taiwan B2C channel satisfaction model or online shopping satis- had reached 13.76 million and there were 9.52 million reg- faction model, satisfaction is considered as an important ular Internet users at the end of September 2005, with an construct because it affects participants’ motivation to stay Internet penetration rate of 42% (FIND, 2006). Having with the channel and regarded as an antecedent of repur- been shifted to entertainment with noticeably increasing chase (Devaraj, Fan, & Kohli, 2002; Skogland & Siguaw, number of online game users, online game has attracted 2004; Yi & La, 2004; Yang & Lin, 2006). But what are the key factors that can make them satisfied with the prod- * Corresponding author. ucts and services, which, in turn, enhance their loyalty, E-mail addresses: [email protected] (H.E. Yang), [email protected] especially, in online game service environment, are still (C.C. Wu), [email protected] (K.C. Wang). under study (Dick et al., 2005). The purpose of this study 0957-4174/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.eswa.2007.12.005 H.E. Yang et al. / Expert Systems with Applications 36 (2009) 1816–1825 1817 is to empirically assess an online game service satisfaction market mechanism and there were no transaction costs. and loyalty model, including experiential value, transaction Transaction was affected from uncertainty and bounded cost, and service quality, the three antecedents of online rationality of environment and will generate many transac- game service satisfaction and loyalty and test the associa- tion costs. Williamson (1987) extend and develop a more tions among the constructs in the model. completely theory of transaction cost. The framework of transaction cost analysis (TCA) 2. Conceptual background builds on the interplay between two main assumptions of human behavior—bounded rationality and opportunism, 2.1. Experience value and three dimensions of transactions—asset specificity, uncertainty, and frequency (Devaraj et al., 2002). Experience value can be divided into two parts: utilitar- ian value and hedonic value. 2.2.1. Asset specificity A specialized investment that cannot be redeployed to 2.1.1. Utilitarian value alternative uses or by alternative users excepted at a loss Utilitarian consumer behavior has been described as of productive value. Asset specificity can take several task-related, and rational (Batra & Ahtola, 1991). Per- forms, of which human, physical, site, and dedicated assets ceived utilitarian shopping value might depend on whether are the most common. the personal need shopping was accomplished, often, this There are four main types of asset specificity determined means a product is purchased in considered and efficient by Williamson (1987): manners. This shopper may find value only if the shopping is completed successfully to get everything done (Babin, Site specificity: It is observed when firms and plants are Darden, & Griffin, 1994). Koufaris, Kambil, and Labar- located in close proximity in order to minimize transpor- bera (2001) proposed that utilitarian value (time saving, tation and inventories. Since these assets are immobile, control, better product information) endued by interactiv- the setup/relocation costs are high. ity affecting approach responses toward a product or Physical asset specificity: It refers to plant, machinery, website. and technology that are specific to a transaction. Human asset specificity: When employees require sub- 2.1.2. Hedonic value stantial training and ‘‘learn by doing”, the cost of auton- Shopping research has long emphasize the shopping omous contracting over an employment relation experience on the utilitarian aspects, which has often been increases, making common ownership of successful described as task-related and rational (Batra & Ahtola, stages more desirable. 1991) and related closely to whether a product acquisition Dedicated asset specificity: It involves making invest- mission was successfully accomplished or not (Babin et al., ments in dedicated assets on the behalf of a particular 1994). However, traditional product acquisition explana- buyer. tions may not fully portray the totality of the shopping experience (Bloch & Richins, 1983). Because of this, the 2.2.2. Uncertainty last several years have seen resurgent interest in the shop- According to Liang and Huang (1998), there are two ping experience on the hedonic aspects and researchers uncertainties: first, consumer thought the product may have recognized the importance of its potential entertain- not conform to his expectation, is product uncertainty, sec- ment and emotional worth (Babin et al., 1994). ond, consumer may not believe completely in transaction Hirschman and Holbrook (1982) described consumers process, is process uncertainty. as either ‘‘problem solvers” or in terms of consumers seek- ing ‘‘fun, fantasy, arousal, sensory stimulation, and enjoy- 2.2.3. Frequency ment”. This mainly depended on people view shopping as a When transaction has attribute of asset specificity, fre- work or view shooing as fun. Utilitarian value involves quency decided that the investment cost can be covered. shopping efficiency and making the right product choice When frequency times are more frequently, investment cost based on logical assessment of product information, on more possibly can be covered. contrary, consumers view shopping as an adventure. Hir- Therefore, we know what factors cause exchanged diffi- schman and Holbrook (1982) thought these forms of plea- cult and generate transaction cost is the interaction effects sure as the experiential (hedonic) value of the consumption among human bounded rationality and opportunism, envi- experience, so hedonic value differs from utilitarian value. ronmental uncertainty and complexity, information asym- metry, small number and transaction characteristic. 2.2. Transaction cost Williamson (1987) notes that a transaction occurs when goods or services are transferred across a technologically The concept of transaction cost was represented by separable interface. Transaction costs are added to produc- Coase (1937), broken that in traditional economic back- tion costs and should include the market transaction costs ground people consider transaction will run perfectly in and the costs of intrafirm managerial transactions (Masten, 1818 H.E. Yang et al. / Expert Systems with Applications 36 (2009) 1816–1825 James, & Edward,