About 59 percent of Americans play video games — a huge, multibillion-dollar industry — and about 51 percent of American households have at least one gaming console.
New research from Wendy Moe, a University of Maryland marketing professor, and John Healey, an assistant professor at Tulane University’s business school and former doctoral student at this university, could help content creators better target this demographic by demonstrating sales trends for video games and gaming consoles.
Their research will be published in the International Journal of Research in Marketing next year.
“Essentially, we were looking at how what we call ‘installed bases’ within the video-game market evolve over time as more people are added,” Healey said.
In their research, Moe and Healey define “installed base size” as the number of consumers who have adopted a gaming platform. To investigate how these bases shift over time, they looked at sales for the PS3, Xbox 360 and Nintendo Wii — the seventh generation of gaming consoles — during the first 230 weeks each console was available.
These systems were competing against one another at about the same time, Healey explained. For further comparison, the researchers also looked at game sales for about 100 games that could be played on all three systems.
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They observed two factors, Healey said: “innovativeness,” which refers to the proportion of people who adopted the platform early in its life cycle, and “recency,” which is the proportion of adopters in recent weeks, which referred to a predetermined one- to five-week period.
“We found that installed bases with a higher percentage of early adopters are going to see high rates of content sales,” Healey said. “Also, a base composed of a lot of recent adopters, or people who just recently bought a console, also going to see a high level of content sales, but for a short period of time.”
Avid gamers or “innovators” who buy the console as soon as it’s released will tend to buy more games overall, Moe said. Less avid or more “recent” gamers also go through a stage in which they buy a lot of games right after they buy the console, so peaks in game sales are often seen right after a peak in console sales.
This research showed it’s important for companies that produce gaming content to consider not just how many gamers are on a console, but also when the gamers first bought the console, she said.
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Hank Boyd, a clinical professor from the business school’s marketing department who was not involved with this research, said this study points to the importance of timing and understanding your customers.
“Whenever you’re in business, if you had a crystal ball that could tell you how many people are going to be interested in this product at a certain time … that would be perfect,” Boyd said. “But no one has that crystal ball.”
Instead, research like Moe and Healey’s takes huge amounts of data to peel back the layers and show what is really going on within a market, Boyd said, which can be hugely valuable.
“These are huge markets,” Healey said. “If you’re a content developer, what this [research] says is maybe we shouldn’t be waiting quite as long to be releasing content. … Maybe we should be moving some of our content to earlier in the life cycle of the platform to take advantage of these high-value ‘innovator’ consumers.”
