Video game was the first truly digital entertainment medium, requiring processing power both in the production and consumption stage. Born out of the transistor, it was also intimately connected with its logic: the doubling of the processor capacity every 18th month or the halving of the price for the same processing capacity in the same time. Transistor technology and video games have been able to conquer society in an evolutionary process. Hence, video games have had an unprecedented ability to conquer new platforms and incorporate new technologies. In this regard it is the foremost example that growth of a medium succeeds not by digital convergence but digital divergence (1). What started out on a mainframe has later moved to the arcade, the home console, handhelds, the personal computer, and the mobile phone. The development of new platforms has made gaming experience possible trough a more diversified market that incorporate a larger part of our life (work, home, travel time, leisure time) and economic segments. Today, games are available on five different platforms (2), in some cases these different platforms have been non-competitive in the sense that they have complemented each other (such as the handheld and the console), in other cases they have been competitive to a large degree (e.g. the console and the PC). The game mediums’ unique ability to utilize and adapt to different platform makes it metaphorical to its nature. For every gaming platform, games have developed its own expression and the platform diversification in itself has also been one of the reasons behind the long term viability and growth of the game industry; when one platform for various reasons has stagnated, another platform has been able to continue to innovate. The development of hardware has also changed the nature of games and gamers from a socio-cultural point of view. When the main gaming market moved from the arcade to the home console market, adventures with developed characters became possible. When the CD-ROM was introduced to the console market with Playstation and Sega Saturn, the ability to incorporate music, video and high quality pictures made lifestyle oriented games possible that could follow different cultural trends. The evolution of communication technology made different kind of online games possible, making games a social experience. The move from the arcade to the home meant, from a sociological point of view, that the group of players became more diverse. People who previously would or could not play computer games due to the fact that the games were placed in public meeting places mostly dominated by young males, could now enter the game worlds from home: elderly people, children, and women. Recent surveys of Massively Multi-Player Online Role-Playing Games (MMORPGs) (3) show, for example, that the average age of players is unexpectedly high, and that a comparatively large fraction of the players are women. The domestication of computer games also led to a higher degree of social complexity in- and outside the games. In addition to the interaction with players in the game the home backdrop allows interaction with family members and friends physically present. The use of home communication technologies for gaming purposes increases the interaction complexity further. The result is a multi-faceted and simultaneous on- and offline interaction process. Object Our paper explores how the shifts and diversification of video game platforms have affected both the industry, as well as its socioeconomic context. We argue that the technological development in primarily processing capacity and later on storage capacity and communication technologies profoundly has changed the comparative advantages of different business model over the history of video games. The nature of this transformation can explain the shift in industrial leadership for companies producing hardware, as well as the outcomes of the battle between firms from different industries competing for this leadership. The paper will study the hardware and industry system in three major periods, the Atari era, the Nintendo era and the Sony era. Each period has had its own market logic and the shift has been unexpected but fast, regardless of the strong position held by the dominant firm. As digital technology has transformed boundaries between industries, firms from many earlier separated industries have entered the game hardware market. Repeatedly, the disruptive nature of technology has changed the competitive marketplace. Industrial leaders have been unable to change when the technological development has transformed the competitive advantages of different business models. To a large degree, the situation resembles what has been described as "the innovator’s dilemma" (4). We argue that the proliferation of platforms have been essential to the evolution of the video game industry. When one platform stagnated, new forms of software could evolve in entirely unexpected places. The multitude of platforms made it possible to overcome tendencies of stagnation. It has also made it harder for dominant actors to monopolize or control the market. Technology has always found a way to slip through. The recent emergence of on-line gaming has increased the room for innovation in several unexpected ways. Indeed, it has added a new dimension to gaming. As communities evolve around games an interactive social context is added. The effects of Metcalfe’s law are added to Moore’s law, and a vast expanse of innovative possibilities is created. The new social context of gaming might call for a very different kind of entrepreneurial capabilities. (1) Jenkins, H. (2001) "Convergence? I Diverge" Technology Review, June issue. (2) Console, handheld, PC, arcade, mobile phone. (3) Yee, N. (2004) "The Psychology of MMORPGs: Emotional Investment, Motivations, Relationship Formation, and Problematic Usage" in Schroeder, R. & Axelsson, AS. (eds.) Avatars at Work and Play: Collaboration and Interaction in Shared Virtual Environments. London: Springer-Verlag. (in press) and Axelsson, AS. & Regan, T. "Playing Online" in Peter Vorderer & Jennings Bryant Playing Video Games: Motives, Responses, and Consequences. Hillsdale, N.J.: L. Erlbaum Associates. (4) Christensen, C. (2000) The Innovator’s Dilemma. HarperBusiness Essential.
Contact: Jan Jörnmark, Chalmers University of Technology/Gothenburg University, email@example.com
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