Publication Type

PhD Dissertation

Version

publishedVersion

Publication Date

3-2025

Abstract

Despite the prosperity of online gaming industry in China, online gaming firms cannot ignore the survival crisis brought by fierce competition. It is quite common for game developers to face issues like low game survival rates and poor performance, with some games even failing upon launch. To address these challenges and gain competitive advantages, game developers accelerate iteration speed and continuously provide users with new content or services. Since most companies found they cannot meet their development needs through traditional innovation models, understanding how to achieve high performance through iterative innovation has become crucial for game developers. Innovation starts with an initial idea and, through each iteration, constantly identifies problems, adjusts and refines ideas, and continuously improves. This iteration process, characterized by intensive, "small and fast" adjustment, achieves the commercialization of innovation, helping secure a competitive advantage and enhance game performance in the market.

Although existing research has examined the importance of iterative innovation in the Internet and software industries, there is no consensus on its practical implementation in the online gaming industry. Drawing upon the concepts of market agility, external awareness, iterative innovation and defect density, this study consists of two independent yet complementary studies. Study 1 explores the impact of market agility, external awareness, and defect density on iterative innovation, while Study 2 further examines the impact of iterative innovation on product performance in the online gaming industry. Utilizing fixed effects models, both studies will then use longitudinal data on 20 game products from a Chinese game firm as samples. In Study 1, it is found that the greater the team’s market agility, the stronger its ability for iterative innovation. Counterintuitively, the more external awareness the game has, the less iterative innovation the team has. When a product has high external awareness, firms have to spend significant time understanding and analyzing external awareness due to the large user base, which reduces the time available for iterative product development, thereby slowing down the pace of iterative innovation. Additionally, teams may be more inclined to continue using game elements and mechanics that have already proven successful rather than risk introducing entirely new innovative features. Moreover, I find that the game defect density in previous period acts as a suppressor: the lower the defect density, the stronger the positive impact of market agility on iterative innovation. Similarly, the lower the defect density, the stronger the negative impact of external awareness on iterative innovation. In Study 2, I find there is an inverted U-shaped relationship between iterative innovation and product performance.

Keywords

Iterative innovation, Market agility, External awareness, Defect density, Online gaming industry

Degree Awarded

SMU-SJTU Doctor of Business Administration

Discipline

Strategic Management Policy | Technology and Innovation

Supervisor(s)

GENG, Xuesong

First Page

1

Last Page

86

Publisher

Singapore Management University

City or Country

Singapore

Copyright Owner and License

Author

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