Optimal Distinctiveness in the Console Video Game Industry: An Exemplar-Based Model of Proto-Category Evolution

Abstract

In this paper, we develop an exemplar-based model of the emergence and evolution of proto-categories—new groupings of products that are only weakly entrenched but have the potential to become widely institutionalized—and examine how different positioning strategies of new entrants vis-à-vis the exemplar of a proto-category affect entrant performance. Empirically, we study the U.S. console video game industry where proto-categories frequently emerge and evolve around exemplary hit games. Analyzing a proprietary database of 6,544 games comprising 78 such proto-categories, we find that, in the early stages of proto-category emergence, conformity with the exemplar’s features is positively associated with new entrants’ sales. As a proto-category evolves, a moderate level of differentiation becomes important for enhancing sales. We also find that this temporal dynamic is driven by the changing competitive intensity in the proto-category and strongly mediated by critics’ reviews. Moreover, the mediating effect of critics’ reviews on entrant sales becomes increasingly salient with the evolution of a proto-category. Finally, we show that accounting for the influence of emerging prototypes does not diminish the explanatory power of the exemplar model we propose. We conclude the paper by discussing the implications of our findings for research on categorization and optimal distinctiveness.

What's the value of being different when everyone is? The effects of distinctiveness on performance in homogeneous versus heterogeneous categories

“…Taken as such, I view my findings as consistent with recent work on categories highlighting the importance of alternative categorization approaches, such as a goal-based approach (Durand & Boulongne, 2017;Durand & Paolella, 2013), or alternative benchmarks such as the most salient or exemplar member of a category (Vergne & Wry, 2014;Zhao, Ishihara, Jennings, & Lounsbury, 2018). At the same time, my results clearly show that the prototype-as-average approach has strong explanatory power in homogeneous categories-where the average tends to be more meaningful, to start.…”

Unwelcome voices: The gender bias‐mitigating potential of unconventionality

“…As stated before, we define project unconventionality as the degree of distinctiveness of a focal project versus typical alternatives, a concept that is theoretically distinct from related constructs such as novelty, innovativeness, or risk‐taking (Zhao et al, ). Although substantial research indicates that flouting normative standards can be hazardous or delegitimizing (Deephouse, ; Durand & Kremp, ), research also indicates the many benefits of unconventionality.…”

“…We focus on the implications of leader gender in creative, project‐based industries and theorize that project unconventionality —defined as the degree of distinctiveness of a focal project versus typical alternatives (which does not necessarily include a paradigmatic shift in novelty or radical innovation, as we will discuss in the Theoretical Development section) (Zhao, Ishihara, Jennings, & Lounsbury, )—mitigates gender bias in terms of how external stakeholders perceive the project's quality. Consistent with prior research, we define a project as any discrete product or organizational initiative observable by stakeholder audiences (Prencipe & Tell, ).…”

Anchors in Rough Seas: Understanding Category Spanning as a Source of Market Coordination

“…The commercial success of existing offerings acts as a strong market signal for producers because it resolves market uncertainty (Lieberman and Asaba, 2006); imitating successful products thus proves a conservative strategy to capture value (Banerjee, 1992;Ozalp and Kretschmer, 2018;Strang and Macy, 2001). This argument applies not only to focused products but also to spanning products (Zhao et al, 2018). For instance, restaurants serving Thai cuisine bear few risks in serving khao phat , which is a focused and favoured dish, yet there is also a market for the American version of the khao phat with ketchup, raisins, and bacon.…”

“…Our paper addresses this question by relaxing the association between spanning and disruption (Durand and Paolella, ; Wry et al, ) and by advancing commercial success – i.e., positive market reception (see Delmestri et al, ) – as a condition under which spanning products neither create confusion nor necessarily spawn new categories. In fact, maintaining that spanning products are less successful than focused products (Hsu et al, ) should not prevent us from acknowledging that, among spanning products, some might enjoy commercial success (Zhao et al, , ). We thus propose commercial success as a signal that compensates for the confusion inherent to widespread spanning, and we discuss how the commercial success of spanning products helps producers and consumers to coordinate their market activities.…”