Game Developer (3/3): Could Specialized Complementary Assets Be Your Creative Industry Advantage?

Explore four critical assets—portfolio diversity, marketing acumen, gatekeeper relationships, and brand reputation—and their pivotal role in shaping market success. Strategic partnerships emerge as a viable avenue for content producers to harness these assets and optimize their commercial endeavours.

.credits: T.L.J.Broekhuizen

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Formerly, content producers, including video game developers, music producers, and writers, heavily relied on specialized complementary assets owned by entities like publishing houses and brick-and-mortar retailers to access their target audience. However, the digital revolution has enabled direct consumer engagement without intermediary dependencies.

For instance, independent game developers can now leverage platforms such as Steam or the App Store to globally distribute their products, thereby eliminating the necessity for conventional publishing contracts. Nevertheless, there are four prevailing specialized complementary assets, each essential in enhancing market performance and mitigating risks for content producers. (T.L.J.Broekhuizen et al., 2013)

Large portfolios

In addition to hedging financial risk, large portfolios also provide bargaining power against platform holders who facilitate digital storefronts, and thus can be used to negotiate preferential ‘shelf spacing’, higher revenue margins and advantageous distribution terms.

Marketing & Sales capabilities 

Publishers possessing extensive marketing & sales expertise and resources can leverage these assets to promote content effectively, capture consumer attention and maximize its market reach.

For example, strategic advertising & partnership campaigns can contribute to heightened brand awareness and consumer engagement, ultimately translating into increased sales and market share. (Teece, 1986)

Relationships with gatekeepers

Gatekeepers control access to the market and wield significant influence over content selection and promotion. Established relationships with key gatekeepers facilitate access to prime promotional opportunities, endorsements, and favorable reviews, which can significantly impact consumer perceptions and purchasing decisions. (Lampel et al., 2000).

Reputation

A publisher's reputation for producing high-quality, innovative content can serve as a powerful driver of consumer trust and loyalty. Moreover, a strong reputation can confer a competitive advantage, enabling publishers to command premium pricing, secure lucrative partnerships, and attract top talent.

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How can learnings from the creative industry

be transformed into other sectors ??

What are the crucial specialized assets in your industry?

Do you have access to them ??

What type of partnership approach aligns with your organization's objectives in today's dynamic business landscape ??

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Conclusion

In assessing the viability of strategic alliances, the crucial consideration lies in whether the reduced returns per unit for content producers are outweighed by the enhanced market performance derived from leveraging the incumbent’s specialized complementary assets.

The success of commercialization strategies hinges on the availability of these assets and the capacity of content producers to extract value from the product's market performance.

In contexts where entrepreneurial content producers lack such assets, strategic alliances offer a pathway to tap into the publisher’s specialized complementary assets, yielding rents that surpass partnership costs.

The lessons learned from the Game Developer case study underscore the need for tailored strategies and a nuanced understanding of risks and limitations.Learn more about international strategic alliances and discover our .straxQ Academy.

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References

1. Broekhuizen, T. L. J., Lampel, J., & Rietveld, J. (2013). New horizons or a strategic mirage? Artist-led-distribution versus alliance strategy in the video game industry. Research Policy, 42(4), 954-964. 

2. Dyer, J.H.; Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of Management Review 23(4): 660-679.

3. Lampel, J., Lant, T., Shamsie, J., 2000. Balancing act: learning from organizing practices in cultural industries. Organization Science 11 (3), 263–269.

4. Teece, D.J. (1986), “Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy,” Research Policy, 15(6): 285–305.

5. Teece, D.J. (2010), “Business Models, Business Strategy and Innovation,” Long Range Planning, 43(2/3): 172–194.