Research themes : intellectual property and competition / closed and open models of innovation in digital goods industries / business models and innovations / Competition in the video game industry
Key words : digital goods, copyright, patents, innovation, video games industry, social games, F2P economics
For the past years, I have carried out research on the online consumption and the production of digital contents. This research aims to explain and propose new business models for supplying digital contents. In Davidovici-Nora (2005, 2006), I focused on the economic impacts of digital goods piracy and proposed the first survey of the economic literature. The first result of this survey is that piracy has no systematically negative impacts on the supplier of digital contents and that under some circumstances, piracy can even increase producers’ surplus and consumers’ surplus. The second result of this survey is that limiting piracy by implementing digital rights management that restricts portability and copying for personal use of digital music are less efficient than trying to make legal consumption more attractive to pirates. This second point lead me to deepen the way digital music is consumed online and to propose a new form of bundling where digital goods are understood as a mix of pricing and of specific intellectual property arrangements.
As soon as different forms of intellectual property are possible for pure digital goods, it changes the way these goods are produced. Since 2009, I have been investigating another cultural and creative industry : the video and computer game industry. Computer games are particularly concerned with open innovation issues.
I started with open innovation strategies which is very specific in this industry since it concerns not only upstream developers but also downstream players, The economic model is very original since it stands between open source and copyright organization while engaging players in co-creation. Players are invited to develop contents (sort of derivative products) for the game they are playing. This is the organizational model of innovation used by Blizzard in the most famous massively multi-players online role playing game, World of Warcraft but many others major developers/publishers are using also this strategy. In Davidovici-Nora (2009), I explain how Blizzard mixes Open Source organization and traditional copyrighted innovations to increase the attractiveness of its game to the players’ community.
In 2010-2012, I participate in a research project supported by RNA (Research National Agency in France) on the impact of digitalization on cultural industries and I worked on the computer game industry. Based on case studies of 18 famous franchises, I have developed a comprehensive meaning of the innovation strategy in a digitalized era and what are the roles of developers and of gamers in the dynamics of innovation.
In a paper co-written with Marc Bourreau (september), I explain how the economic theory of two-sided market lays the foundations of the competitive dynamics and innovation strategies in the industry of console video games.
Then I have been investigating Free-to-play economics and business models mixing design and economic approaches.
Currently, I am investigating the following subjects :
- The impact of new gaming platforms and of Free-to-Play business model on the industrial organization of the video game industry: the emergence of new mobiles/tablets markets creates also new “majors” and how is it disrupting the industrial organization ?
- The notion of dominant design in Free-to-Play in 2013: a databases analysis to find best design/business good practices.
- Radical and incremental innovations in video games hits: where do hits come from ?
- The dynamics of technological, design and business innovations in the video/computer game industry and how are they intertwined to fuel growth ?I am more generally interested in questions mixing technology, creativity, usages and business models.
Davidovici-Nora M. (2016), “Typology and strategies of online distribution platforms of video games: overview and competitive issues”, Revue d’Economie Industrielle (in French) forthcoming in december, n°156
- Summary : Online video games distribution on platforms is today the dominant mode of distribution. In this paper we apply the platform economic theory to the digital video game distribution platforms to understand the current organizational and competitive challenges of this industry raised by the digitalization and the variety of strategies of the main platforms. We find that technological choices (production of hardware and software, proprietary or dedicated to video games technologies) and vertical integration organization are key factors for understanding development strategies of these platforms and the ways they create and grow direct and crossed network effects. Our paper also contributes to the understanding of the birth and growth of the digital distribution of video games as well as its main current issues.
Davidovici-Nora M. (2014), “Free and Paid Business Models Innovations in the Video Game Industry”, Communications&Strategies, n°94, 2nd trim.
Davidovici-Nora M. (2013-2014), “Innovation in business models in the Video Game Industry: Free-to-Play or the gaming experience as a service” , The Computer Game Journal, December-January.
Davidovici-Nora M., Bourreau M. (juin 2012), “Two-sided market theory applied to the video game industry””, Revue Réseaux. (in French) (will be available online from january 2015 onwards)
Davidovici-Nora M. (juin 2012), “Creations by players: the innovation is open !”, Télécoms, n°166. (in French) click here
Davidovici-Nora M., Auray N. (mars 2012), “L’industrie des jeux vidéo sur PC à l’ère d’Internet – Analyse des stratégies d’innovation ouverte avec les communautés de joueurs”, Projet ANR-PANIC, Télécom-Paristech.
Davidovici-Nora M., Auray N. (2011), “L’industrie des jeux vidéo” dans Cultures numériques – regards sur les industries créatives, éditeur manuscrit.com, Octobre/Novembre.
Davidovici-Nora M. (2009), “The Dynamics of Co-Creation in the Video Game Industry: The Case of World of Warcraft”, Communications & Strategies, 73, 1st quarter, pp.43-66. click here
Davidovici-Nora M. (2005), “Les analyses économiques du piratage des biens numériques”, Revue Française d’Economie, octobre. Click here
Davidovici-Nora M. (2015), Designing Monetization Strategies in Free-To-Play Video Games, AIMAC 2015 Conference (International Association of Arts and Cultural Management) – Aix en Provence – June
Davidovici-Nora M. (2014), 40 years of innovation and economic models in the video game industry, Workshop Polytechnique and UCL, March 19th, London
Davidovici-Nora M. (2013), F2P: a shift in the business model paradigm in the video games industry, Conference on the Evolution of the Video Games Industry’s Ecosystems, December 4th 2013, Game Connection, Paris.
16 May 2014 – Economic referee on “Présentation du recours aux UGC dans l’animation des jeux video” by J. Piriou (lead-designer Ubisoft), Workshop on the role of epistemic communities and the place of free productions in the economy, Versailles University.