Bounded careers in creative industries: Surprising ...

Industry and Innovation

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Bounded careers in creative industries: Surprising patterns in video games Steven Casper & Cornelia Storz To cite this article: Steven Casper & Cornelia Storz (2017) Bounded careers in creative industries: Surprising patterns in video games, Industry and Innovation, 24:3, 213-248, DOI: 10.1080/13662716.2016.1224705 To link to this article: http://dx.doi.org/10.1080/13662716.2016.1224705

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Date: 15 February 2017, At: 07:59

Industry and Innovation, 2017 VOL. 24, NO. 3, 213–248 http://dx.doi.org/10.1080/13662716.2016.1224705

Bounded careers in creative industries: Surprising patterns in video games Steven Caspera and Cornelia Storzb a

School of Applied Life Sciences, Keck Graduate Institute, Claremont, CA, USA; bDepartment of Economics and Business Administration, University of Frankfurt, Frankfurt am Main, Germany

ABSTRACT

We contribute empirical evidence to the literature on careers in creative industries. It has been argued that boundaryless career patterns are at the core of creative industries. We question this widely held argument and show that the most innovative Japanese video game developers make use of employment models that prioritise stable employment and bounded careers linked to it. The paper makes several contributions: First, it carefully describes career development patterns of Japanese video game developers, which have so far not been documented. We hereby contribute to the literature on creative industries by adding an important empirical case of bounded career patterns. Second, we try to explain why Japanese firms stick to traditional practices by addressing the link of bounded careers to integrative capabilities, and discuss what this means for creative industries in general and for video games in particular. We argue that integrative capabilities matter also in creative industries.

KEYWORDS

Careers; creative industries; video game industry; innovation JEL CLASSIFICATION

J4; J6; O3; P5

1. Introduction Important shifts have occurred in how the nature of careers is viewed (Sullivan 1999). Within an increasingly dynamic and complex environment, hierarchies are being transformed into networks (Garnsey and Leong 2008), formal rules into informal spontaneous coordination and stable principles are increasingly viewed as temporary (Garud, Kumaraswamy, and Langlois 2002; Rodrigues and Guest 2010). Creative industries are assumed to be in additional need of flexible institutions (Lange et al. 2008), as inter-firm mobility helps creators and professionals enrich their human capital, and firms become more flexible in adapting to uncertain markets and demand volatility (Rodrigues and Guest 2010; Mollick 2012). Creativity is increasingly understood as a systemic process where network and peer learning relationships are of central importance (Sullivan 1999). These arguments are reflected in the literature on high-quality institutions, advocating for more market-based organisational forms, in particular in regard to labour markets (Audretsch and Thurik 2001; Audretsch and Fritsch 2002; Sobel 2008).

CONTACT Cornelia Storz

[email protected]

© 2016 Informa UK Limited, trading as Taylor & Francis Group

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S. Casper and C. Storz

Can we conceive boundaryless careers as being a dominant principle within creative industries? Have bounded careers and organisational boundaries actually become a handicap for them? In the following study, which focuses on the video games industry, we would, a priori, expect that, in line with the literature, a common institutional framework supporting new patterns of career formation should be found. We should expect a general tendency towards organisational fluidity and inter-firm mobility. Long-term employment should be less beneficial as it does not correspond to the needs of flexibility and knowledge creation. However, our research herein does not support this expectation. Japanese video game developers are highly competitive in terms of turnover and innovativeness, but work organisation patterns of the most innovative Japanese videogame developers are closely aligned to stable career paths. The primary goal of this paper is to support this finding, and to discuss implications for the literature by exploring the link between HRM, capability formation and innovation. In our view, the need of knowledge integration in creative industries has been underestimated and has important implications for the design of careers. We will elaborate this aspect in the discussion section of the paper. We have selected the video games industry because it is a new, knowledge-intensive and economically relevant industry (OECD 2005; Georgieff et al. 2008). The video game industry emerged in the late 1970s alongside other new industries, such as software and biotechnology (Lazonick 2009), and has developed into a fully grown branch of the creative industries with a turnover of more than twice the size of the recorded music industry (PwC 2011). Japan is, together with the U.S., home to the top-performing firms (SoftwareTop100 2010). The purpose of this study is to document how stable HR practices are possible within the creative industries by investigating the motivation that drives Japanese video game firms to adhere to bounded careers. We contribute to the literature by offering empirical evidence that questions boundaryless career theories. Our findings demonstrate that employment models with strong internal labour markets and HR practices associated with them are the dominant pattern within Japanese video game firms. We extend the literature by showing how and why creative industries may be innovative with bounded careers patterns. We develop these arguments over several sections. We start by describing our theoretical framework in more detail. This is followed by sections explaining our study design and empirical expectations. We then proceed to a detailed presentation of our empirical results, followed by sections exploring wider theoretical and empirical implications of our research. The article ends with a discussion of limitations of the study, and a conclusion.

2. Theoretical framework and literature review 2.1. Changing career concepts: boundaryless and post-corporate careers Traditionally, careers have been characterised through a linear model of career development within a small number of firms (1 or 2), in which higher stages are associated with more success (Hall 1996; Sullivan 1999). This career path is viewed to have changed, though. Although some authors acknowledge that stable institutional arrangements continue to exist (Tripsas 1997a, 1997b; Cadin, Guérin, and DeFillippi 2006; Ramirez 2007), the literature on careers, particularly within creative industries, stresses that career development has dramatically shifted away from the linear model. The ‘boundaryless’ (Arthur and Rousseau 1996) or the ‘post-corporate career’ (Peiperl and Baruch 1997) is ‘becoming the norm rather


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than the exception’ (Sullivan 1999, 458). Central to this argument is the description of phenomena like the shift from long-term employment centred on well-defined professions to more flexible labour usage and entrepreneurship (Van Gelderen et al. 2008), to atypical or non-standard work arrangements (DeFillippi and Arthur 1998), to temporary organising principles (Bakker 2010), including short-term projects (Sydow, Lindkvist, and DeFillippi 2004), to hiring of temporary contract workers (Kalleberg 2000) and to declines in the average employment length (Bidwell 2013). Intentionally, finite time spans characterise each of these patterns. The boundaryless career concept (Arthur and Rousseau 1996) refers to careers in which people cross boundaries of firms, industries and regions. This new career pattern is independent from traditional career boundaries which is why it is called a ‘boundaryless career’, including entrepreneurial choices to break away from existent organisations to pursue one’s own venture (Van Gelderen et al. 2008). A related concept on post-corporate careers (Peiperl and Baruch 1997) stresses that new forms of careers take place outside boundaries, in particular outside of large organisations, providing more flexibility to demand, and opening up new perspectives on autonomy, satisfaction and learning. Entrepreneurship is an important element within career development. Employability across firms is enhanced by skills that are transferable, and self-employment may be one source that contributes to employability (or self-employability) of entrepreneurs. Within such an environment, the importance of network relationships grows as they provide knowledge and information that enhance both the worker’s knowledge stock as well as his career opportunities (Sullivan 1999). Career changes are linked to specific career capital which may be utilised for prospective forms of employment (Terjesen 2005). These new arrangements contrast strongly with the prior dominance of tight organisational hierarchies in which careers were bounded (Sanchez and Mahoney 1996; MacCormack, Baldwin, and Rusnak 2012). Sullivan (1999) summarises the nature of these new arrangements with flexibility in employment relations, transferability of skills across multiple firms, on-the-job learning, job enrichment, development of networks and an individual’s responsibility for career management. Drivers behind this development include external factors like the reconfiguration of large firms (Tams and Arthur 2010) or the emergence of transnational value chains (Chiarvesio, Di Maria, and Micelli 2010). However, proponents of the boundaryless career argument make also the more general claim that dynamic careers are more beneficial for creating and producing new knowledge. Mobile workers help employers to gain access to new knowledge sources more easily, though mobility also creates the risk that knowledge can more easily be lost. This holds true both on the individual as well as on the organisational level. On the individual level, more mobile knowledge workers tend to be less conservative and more willing to initiate substantial changes, behaviours that are increasingly relevant within a competitive environment (Ramirez 2007). More flexibility helps to reduce cognitive lockins and to enhance cognitive flexibility (Ichniowski and Shaw 1995; Zhou, Dekker, and Kleinknecht 2011). On the organisational level, high-performing organisations have been identified as those that redesign and reinvent themselves continuously (Vaill 1996; Miner, Bassoff, and Moorman 2001), in particular since incoming workers allow the access to knowledge bases external to the firm, and as outgoing knowledge workers create new links (Godart, Shipilov, and Claes 2013). Therefore, the shift towards more fluid organisations has been deemed critical within the recent institutional literature (Audretsch and Thurik 2001).

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Boundaryless career strategies complement the increased orientation of organisations towards project-based strategies (Lindkvist 2004; Whitley 2006), which promote internal market-like processes within ‘quasi-firms’. Work relations are contract-based, and coordination occurs through standardised skills which are tradable across markets (Whitley 2006). Due to their tradable character, careers are organised across firms, including own start-ups. Authority is decentralised, and processes are managed on site. Arguments in favour of flexible career patterns are inspired by research on high-technology regional clusters, which have emphasised the role of social networks in increasing the innovative capacity within a region (Huggins, Johnston, and Thompson 2012). In particular, works on the ‘job-hopping’ culture in Silicon Valley (Saxenian 1994) show that dense networks facilitate job mobility and knowledge generation due to knowledge spillovers. Many policy-related studies therefore link Europe’s and Japan’s labour market regulations to their weaker performance in new industries (McKinsey Global Institute 1997; Botero et al. 2004), recommending more flexibility in labour markets (Keidanren 1996; Lisbon European Council 2000). From this perspective, it seems to be a disadvantage not to rely on open labour markets, fluid organisational forms and flexible career schemes. Indeed, several papers have argued that a strong isomorphism of firms which are embedded in less market-based economic systems may become a barrier towards the emergence of new industries (Cottrell 1994; Anchordoguy 2000). 2.2. New career concepts in the creative industries The demise of traditional careers and the engagement in short-term projects can be observed across all new industries, but the trend is argued to be in particular strong for creative industries, i.e. ‘those economic activities in which symbolic and aesthetic attributes are at the very core of value creation’ (DeFillippi, Grabher, and Jones 2007, 512), involving artistic and design sectors like art, video games, music, graphic design, web design, advertising or publishing (see also DCMS 1998; Mueller, Rammer, and Trüby 2008). As DeFillippi, Grabher, and Jones (2007) framed it, ‘creative business quintessentially is project business’. What sets the creative industries apart from other industries and what makes boundaryless careers matching to their needs is the increased importance of creative output, the high degree of uncertainty and their characteristic as being cross-sectional in nature. Regarding creative output, creative industries are by definition a major source of innovative ideas (Mueller, Rammer, and Trüby 2008). They contribute to an economy’s innovative activities, either by offering creative services to consumers, or by providing them to other firms so that they can be considered as an input to cross-sectional innovative activities. As activities within creative industries rely on individual creativity and skills, boundaryless career patterns play a key role as they allow individuals’ creativity to be enhanced through more heterogeneous knowledge stocks (Florida 2003; O’Mahony and Bechky 2006). A second important feature of creative industries relates to their uncertain and dynamic environment (Jones 1996). In creative industries, it is less the price that influences consumers’ decisions but their social network property as decisions of production and consumption largely depend on the choice of others in the social network. Unpredictable consumer demand makes the creative industries highly dynamic so that consumer demand may be better understood within networks. This requires more flexibility and more adaptive resource allocation than in many other sectors (Potts et al. 2008).


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Finally, the industry is made out of several cross-sectional subsystems; the two most important ones are the artistic and commercial spheres (Caves 2000; Eikhof and Haunschild 2006). Entrepreneurs, also called ‘culturepreneurs’ (Lange et al. 2008), as well as their entrepreneurial networks have been interpreted as ‘communicative providers’ (Lange et al. 2008) between these subsystems. Hence, one important explanation for why boundaryless careers and networks associated with them are dominant in the creative industries is the additional need to integrate and coordinate the artistic and business subsystems by building ‘bonds and bridges’ (Daskalaki 2010). These characteristics of creative industries help explain why they, more than other new industries, depend on mobile careers and entrepreneurial networks. As Jones (1996, 59) in her work on the film industry has formulated it, ‘the lesson taken from industries such as film … is that conceptualizing the firm as the organization is outmoded’. Instead of firms, project-based organisations emerge. A well-known case are the project-based firms in the U.K. feature film industry from which this new type of organising seem to have spread to other dynamic sectors (Whitley 2006). These developments are linked to more market-based incentives where ‘innovators will opt away from fixed salary and towards profit sharing when they have an idea that is highly lucrative’ (Dushnitsky and Lenox 2005, 617). Hence, there is a strong sectoral pressure to adapt HR practices to the needs of creative industries (Cadin, Guérin, and DeFillippi 2006). As a result, we should expect common institutional frameworks for creative industries across different national systems. 2.3. Bounded careers and knowledge integration in video games While works on boundaryless careers have contributed to a better understanding of how careers can be linked to knowledge creation, we argue that they tend to underrate the need for knowledge integration within the creative product itself. In doing so, we do not assert that knowledge creation is not a necessary condition in creative industries. Rather, we will use prior literature to argue that creative products are complex within the product dimension itself, so that stable organisational forms may be more beneficial for knowledge integration. The examination on knowledge integration has been explored from various vantages in the last 30 years, but two main research thrusts provide important backdrops. Casper and Whitley (2004) have shown that integrative capabilities are needed within subsectors of new and knowledge-intensive industries. In this view, internal labour markets are beneficial as they enable socially complex routines (Nelson and Winter 1982; Levitt and March 1988; Kogut and Zander 1992; Ramirez 2007). Jansen, Van Den Bosch, and Volberda (2005, 4) emphasise this link and argue that bounded careers enable individuals to build up ‘combinative capabilities’ by revisiting how new knowledge may be integrated, by rethinking the systemic nature of products, by developing a stronger awareness towards new opportunities for exploitation and by combining sets of newly acquired and existing knowledge (see also Subramaniam and Youndt 2005, 452). Individuals with more integrative capabilities develop more ‘holistic’ views (Lindbeck and Snower 1999), and are better able to combine knowledge across boundaries (Casper and Kettler 2001). A second stream of research focuses on the question of knowledge integration within creative industries, and in particular on video games. A series of articles by Cohendet and collaborators (2007, 2008, 2010, 2011; Grandadam, Cohendet, and Simon 2013) has

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addressed the knowledge-based characteristics of video games. They argue that video games are a creative product with a ‘complex mix of technology, art, and interactive story-telling’ (Cohendet and Simon 2007, 587). Diverse communities of specialists including script writers, game designers, graphic designer, programmers or sound artists produce these singular elements of the game. These need, both during game development itself and its production, to be adapted, integrated and coordinated (Cohendet and Simon 2007; Storz, Riboldazzi, and John 2014). Hence, to integrate knowledge across different dimensions seems to be a major challenge within the creative industries. Focusing on the software industry more broadly, MacCormack, Baldwin, and Rusnak (2012) show that different conditions for knowledge integration are linked to different organisational designs, varying between more ‘loosely coupled’ and more ‘tightly coupled’ organisations. Depending on the nature of the task performed, the organisational design tends to vary between more loosely or more tightly coupled organisations. Looser organisational designs are associated with open membership, a lack of hierarchies, autonomy and career paths across organisations, whereas tight organisations are characterised by internal labour markets and a more closed membership, by hierarchies and by organisational, intrafirm careers. In the former case, skills tend to be standardised, occupation and task-based, and hence more tradable; in the latter case, firm-specific skills are acquired. Applying this concept of ‘mirroring’ to creative industries, different forms of organisational design should exist also within the creative industries, depending on the nature of the creative product, with loosely coupled organisations on one side, and tightly coupled organisations on the other side. Hence, in those cases when a high degree of knowledge integration is to be achieved, bounded careers should tend to continue to exist. It is important to notice that also these bounded careers may be connected to project-based forms of firm organisation, but within tighter organisational forms (Whitley 2006). These tighter organisational forms have in common with project-based firms that their nature is more fluid and temporary (Hobday 2000), but they substantially differ from ‘strongly project-based organisation’ (Lindkvist 2004) in that skills are less standardised, and more changeable across (and also within) projects within these firms (Whitley 2006). As skills within such a framework are less standardised, workers tend to commit themselves less to an occupation or task, but to the company. As a result, even if skills have been standardised at the point of recruitment, a lower degree of mobility results into stronger firm-specific skills (Whitley 2006). This is why Whitley (2006) has called them ‘organisational project-based firms’, and contrasts them to the more fluid and open forms of project-based firms. The Japanese video game developers (which will be discussed later) fit into the ‘organisational project-based firms’ pattern as careers within Japanese firms are better characterised by firm-specific boundaries. It is important to note that the organisational design tends to be linked to institutional context in which firms are embedded in (Aoki 1988). To the best of our knowledge, however, there are, with the notable exception of Cohendet and Simon (2007), who stressed the importance of ‘creative slacks’ as a source of creativity, no studies documenting bounded career patterns in creative industries. In the following, we will carefully document the career patterns of highly creative firms, Japanese video game firms and link their career patterns to the nature of videogames in the discussion section.


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3. Study design and research methodology 3.1. Research setting: the video game industry Our research focuses on an important knowledge intensive sector within the creative industries, video games (OECD 2005; Georgieff et al. 2008). The global video game market was worth around US$56 billion in 2010 (Gartner 2013). Industry analysts predict that video games will be the fastest growing form of media over the next few years, with sales rising to US$91.8 billion by 2015, and estimated sales of US$99.6 billion in 2016 (Newzoo 2016a). Video games were first commercialised with Pong, created by a U.S. firm in 1972. Japanese firms entered the industry in the late 1970s. By the late 1980s, Japanese firms had captured about 80% of the global console market (Shao, Dunkin, and Cole 1989). While the U.S. retained a strong competitive position in game software development, particularly in personal computer gaming, Japan has maintained a dominant position in the console-based game business. Today, both countries are similarly competitive. According to the Game Developer Research Ranking, which tallies sales and stock-keeping units, there are 19 U.S. and 20 Japanese game developers among the top 50 developers worldwide (Gamedevresearch 2009). The IGN list of top 100 developers includes 49 U.S. and 34 Japanese firms (IGN 2009).1 According to Newzoo (2016b), 41.2% of the top developers’ turnover in 2015 is generated by U.S. firms, 26.2% by Japanese firms and 32.6% by others (own calculation). Among the top 10 games of 2013 are 4 U.S. and 3 Japanese games (TIME Magazine 2013).2 Recent comparative papers, based on the database Mobygames, show that Japanese games are even significantly more innovative than U.S. games (Storz, Riboldazzi, and John 2014). Furthermore, an analysis based on Metacritic, another commonly used database for creative industries, confirms the strength of Japanese videogames in terms of innovativeness and creativity (Metacritic 2014).3 3.2. Methodology and approach The purpose of this article is to document HR practices dominated by stable career patterns in a creative industry, the video games industry. As this topic is not extensively elaborated in the existing literature, we have chosen a qualitative case study approach. Following Eisenhardt (1989), we chose a three step approach to develop theory from the case studies, i.e. the selection of cases, the instruments and the analysis of the data (see also Eisenhardt and Graebner 2007). With respect to case selection we focused our cases on leading Japanese firms as documented in the Gamedevresearch (2009). We initially expected mobile career patterns and tried to understand how Japanese firms have been able to decouple from the dominant pattern in the labour market, inspired by works of Baba, Takai, and Mizuta (1995) and articles in leading business journals (Hitotsubashi Business Review 2005). However, cases of Japanese firms turned out to be an opposite case to what is documented in the literature on career patterns in the creative industries in the U.S.A. (Appendix 1). To provide new empirical evidence, we leveraged a long-standing relationship of one of the authors with a Japanese game developer to carry out 26 interviews with 21 video game 1

Ten developers come either from Britain, Canada, France or Russia; seven developers have worked in several countries. Among the four U.S. games, one was developed by American developers, but published by Sony. Two games were developed in Canada, one mainly in the U.K. 3 Within the top 25 firms, there are 8 U.S. and 9 Japanese firms (Metacritic 2014). 2

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firms, including 7 of the leading video game developers. These seven firms belong to the largest development firms as identified by Gamedevresearch (2009) and will be called herein ‘large developers’ or ‘large firms’. In total, 12 interviews have been carried out with them. Furthermore, additional interviews have been carried out with companies developing parts of (e.g. arts) or complete videogames; in the Japanese context, these firms are also called ‘suppliers’. Each person interviewed had key roles either in game design or HR, or was a studio head. Interviews lasted one to three hours. As suggested in the literature (Eisenhardt 1989), we used semi-structured interviews to avoid merely confirming established theories and concepts. In the interviews, we asked these key persons about their companies’ dominant HR practices (see below). Table 1 provides an overview of the sample and shortly describes the cases. Regarding the instruments, we used triangulation by multiple data sources. First, drawing on archival material, we provided a general overview of the sector, including performance indications, recent business strategies and industry development. In order to contextualise our findings, we made use of numerous business and company histories of the U.S. (documented in Appendix). An important archive is the database MobyGames. This archive documents the history of videogames, and also contains data on game engines and genres, which were later used to explain the existence of bounded career patterns (Table A1). Second, several executives in game-related business associations and related industries provided background information. We also attended informal meetings organised by members of the Computer Entertainment Suppliers’ Association (CESA), informal get-togethers with individual developers and the annual Game Developers Conference in San Francisco. Third, we searched with the terms ‘game sector/industry’ (in Japanese: gêmu sangyô/gyôkai) relevant articles in leading Japanese newspapers to track developments in the video games industry, ending up with 132 articles for the period between 2006 and 2013. Table 2 provides a data source overview. Finally, for data analysis we followed Strauss and Corbin’s (1998) coding process. Our object for the first round of interviews in 2006 was to understand why the game industry emerged successfully given Japan’s competitiveness gap in the packaged software sector (Storz 2009), and to consider changes in HR practices that preceded the industry’s emergence. We expected that the creative industry in Japan has been successful due to more flexible career patterns, and to more dynamic forms of work organisations. Based on our first round of interviews in 2006, we adapted our focus by analysing stability and change of firm-internal institutions in the field of HRM and firm networks. An example of this was our observation that changes in HR practices, as compared to traditional industries, took place by allowing part-timers and/or contract workers (called ‘career changers’) the access to internal labour markets by providing them regular positions. This new career path was coupled with a ‘fit’ to the firms’ culture, in particular to the organisational skills of knowledge workers – an important aspect that we will extend more in our discussion section. These interviews suggested, together with the documentary analysis, that Japanese firms tend to adhere to long-term employment. We also collected secondary information, in particular from business associations, which were often able to provide details on member companies. In the next stage in 2009, we designed a questionnaire with which we approached developers, and also made use of industry specialist contacts. In particular, we focused on HR policies and, given their interrelatedness to HR practices, inter-firm relations. Categories and themes of our interviews in 2006 and

C

D

E

F G

H I

J

K

L

4

5

6 7

8 9

10

11

12

Founder and President



Founder and President President

Member of the Board (corporate strategy) Recruitment Department Director Creative Center Member of the Board

President President

General Manager Human Resources

Group Leader Technical Group

Company Type of interviewee A Senior Vice President, Japan Studio Director HR Department B Corporate Executive Senior Vice President, Human Resources Division

3

2

1

Table 1. Sample and description of cases.

Unknown

1987 1999, spinout of 3 2001, spinout of 3 1982

1951 1948

1979

1978

2006

1975

Year of foundation 1993

30

17

Unknown

8 123

2226 325

1951

1455

900

3581

Developer

Developer

Developer

Publisher, Developer Anime company (cooperation with video game producers) Developer Developer

Publisher, Developer




Employees (consolidated) Type of firm 400 Publisher, Developer

Yes (company with friendly business relations) Yes (company with friendly business relations) Yes (company with friendly business relations)

No No

No Yes (Tokyo Chamber of Industry and Commerce)

No Yes (General Manager Human Resources) Yes (Investor Relations Department)

Yes, HR Department No Yes (General Manager Human Resources; General Manager Planning and Strategy) Yes (Corporate Staff Division); further talk to President of related trading company Yes (Corporate Staff Division)

Attendance of other interviews partners No

2006

2006

2006

Interview

Interview

Interview

Interview Interview

Mail exchange Interview Interview

2006 2006 2006

2006 2006

Interview

Interview; dinner, together with informant C Interview Interview

Interview; Lunch; Dinner

Interview Interview Interview

2006

2006 2009

2009

2006

2009 2006 2009

Year of interview Source 2006 Interview

(Continued)

17

16

15

13 14

10 11 12

9

7 8

6

5

2 3 4

Interview codes used in the text 1

Industry and Innovation 221

Company Type of interviewee M Member of the Board, General Manager Human Resources N President O Founder and President P Founder and President Q Founder and President R Founder and President S Founder and President T Founder and President U Founder and President 1979 2008 2001 2006 2013 2013 2013 1978

Year of foundation 1973 1000 30 230 31 4 16 4 180

Developer Developer Developer Developer Publisher; Developer Developer Developer Publisher; Developer

Employees (consolidated) Type of firm 500 Publisher, Developer Yes (General Manager General Affairs) No No No No No No Yes (General Manager General Affairs)

Attendance of other interviews partners Yes (DCAJ) 2009 2013 2013 2013 2013 2013 2013 2013

Interview Interview Interview Interview Interview Interview on skype Interview Interview

Year of interview Source 2009 Interview

19 20 21 22 23 24 25 26

Interview codes used in the text 18

Notes: Companies in bold belong to the top game developers according to Game Developers Research Report (Gamedevresearch 2009). Of the top developers, one firm (No 13) was contained in the ranking of Game Developers Report 2008, but not any more in Game Developers Report 2009. Data for employees are unconsolidated, hence include only employees in the holding, excluding subsidiaries.

14 15 16 17 18 19 20 21

13

Table 1. (Continued).

222 S. Casper and C. Storz


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Table 2. Data sources. Source of data Semi-structured interviews with videogame companies

Questionnaires External key informants Annual reports Industry reports Fairs and conferences Business press

Type of data In total, 26 interviews with 21 videogame companies (2006–2013) • 13 interviews in May/June 2006 (including one mail exchange) • 6 interviews in March/April 2009, thereof 5 with interviewees of 2006 • 7 follow-up interviews with start-ups in January/February and March/April 2013 (including one skype interview) Questionnaires of seven large developers (according to Gamedevresearch) Interviews in 2006, 2009, 2013 with leading business associations (e.g. DCAJ, CESA), industrial policy agencies (METI) and industry analysts Annual reports of top developers Mycom Mook; DCAJ; CESA; Fâmitsu Gêmu Hakusho; JETRO; Dentsû; Entertainment Software Association; METI; Eurotechnology Japan Tokyo Game Show; Big Site; in the U.S.: Game Developers Conference Articles about the videogame industry; 2006–2012; 132 articles in total (Search term: gêmu gyôkai/sangyô (game sector/industry) in the following newspapers: Nikkei: 86 articles; Yomiuri Shimbun: 33 articles; Mainichi Shimbun: 6 articles; Asahi Shimbun: 7 articles

Use in analysis Interviews in 2006 aimed at understanding the general setting of video game industry in Japan; interviews in 2009 were aimed at understanding more specifically management and organisation of leading publishers; follow-up interviews in 2013 were used to understand the recent developments within the industry Preparation of the interviews; ‘hard’ facts (like share of regular employees; existence of start-up programmes etc.) Triangulation of informants’ assertions and recollections Fine-grained data of actions and performance; triangulation of informants’ assertions and recollections Fine-grained data of industry development Tracking internal in and external developments to video games industry Tracking internal in and external developments to video games industry

2009 have been recruitment and placement practices, the role of internal and external labour markets, career management and career paths, remuneration and characteristics of inter-firm cooperation. The focus of our interviews in 2013 were on new entrants in videogames (defined as firms founded within the last 10 years) in order to see whether our results hold also true for younger firms. All interview partners were asked to provide information on their respective companies, and to not focus either on the career development of the company’s senior executives or on the career development within the whole industry as such information would have caused issues about triangulation and reliability. Table 3 provides an overview of interview categories and themes. Based on these interviews, we were able to outline the career patterns of leading Japanese videogame firms.

4. Results: career patterns in the Japanese video game industry 4.1. Employment and remuneration: internal labour markets and bounded careers Among Japanese game developers, internal labour markets and bounded careers are standard for all functions related to knowledge work. The extremely low turnover of regular employees – the turnover rate in our cases is about 2% – is noteworthy. Stable employment practices for these workers seem to be counterintuitive as this is precisely the group for which it has been argued that more human capital diversity enhances creativity (Arthur and Rousseau 1996; DeFillippi and Arthur 1998; Florida 2003). Our interviewees, though,

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Table 3. Categories and themes of the interviews. Phase 1(2006): the structure of the video games industry Business field • Size and dynamics of the sector, important rankings • Video games as original products or as non-original products

Role and types of inter-firm cooperation

Background information: • General issues of human resource management and labour market structure • Identification of relevant industry magazines, market reports, databases, industry associations • Research and development activities/cooperation with universities

Phase 2 (2009): HRM policies of large developers HRM • Recruitment/placement • Employment model: role of regular/ irregular employees and changers (between and within companies) • Job description • Career management and organisation of production • Remuneration, performance and incentives External collabouration/inter-company cooperation • Characteristics of cooperation • Existence of start-up programmes (norenwake)

Phase 3 (2013): HRM policies of start-ups HRM • Recruitment/placement • Employment model: role of regular/ irregular employees and changers (between and within companies) • Job description • Career management and organisation of production • Remuneration, performance and incentives External collabouration/inter-company cooperation • Characteristics of cooperation • Existence of start-up programmes (norenwake)

consistently revealed a strong preference for long-term employment, internal labour markets and bounded careers. Only one firm that we interviewed did not build employment on intra-firm careers; however, this firm’s more fluid character was attributed to the lack of opportunities given its relatively smaller firm size compared to other leading developers, reflecting the dual industry structure in Japan where employment in smaller firms tends to be less attractive, and less to a strategic decision towards more flexible types of employment, but also this firm aimed at increasing the share of its regular employees. It is interesting to observe that long-term employment is also the norm of new entrants (even though it may be sometimes more difficult to realise). All entrepreneurs interviewed stressed that they aim at stable employment relations, while introducing flexibility only by a second, external labour market (informants 20–25). In cases where employment relations were less stable as employees left for larger firms, entrepreneurs stated that they would prefer less turnover (informant 20). As one informant put it: I want to work forever with my present core members. (Founder and President, 25)4

Also, inter-firm labour mobility is not incentivised through wage increases. The wage gap between the operative and the top management level is at most 1:10, a relation which is considerably lower than in large U.S. game development firms and comparable to the average wage gap in large Japanese manufacturing firms (JILPT 2007, 50). One of our informants,

4

In this context, it is interesting to see how Japanese developers handle low performers. As they are regular employees and therefore part of the internal labour market, layoffs are not an option. Instead, they re-assign projects or train them: ‘We cannot really do anything. But in a sense, this does not matter, as we give him the work he can do. Important is the balance within the team. Often, we attach low [performers] to high [performers] in order to train them’ (President, 26).


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a large publisher, has, after having experimented with stronger performance-based pay structures, even limited the ratio of (seniority and skill-based) basic income to performance-based income to 1:1 (informant 11). Hence, the idea that seniority-based remuneration will be substituted by profit sharing and other incentive-based forms (Dushnitsky and Lenox 2005, 617) does not hold true for the Japanese case. In a sense, this is not surprising, given that high-powered incentives and open labour markets complement each other; this result is, however, in contrast to what is often assumed to be characteristic for creative industries. While Japanese developers are rewarded for individual performance, particularly when it comes to outstanding developers, in part through new tools like stock options, it is common that firms rely on established practices like awards which are less high-powered incentives, but often linked to career steps within ranking hierarchies (informant 18). An important precondition for such organisational careers is the prevailing pattern of diversification as an entry modus by incumbents. The properties of the 20 leading Japanese and 19 leading U.S. video game firms (Gamedevresearch 2009) are quite different: in the U.S., 17 of the 19 leading firms entered in the industry as new entrants, while only the remaining two firms entered the industry via diversification (Gamedevresearch 2009). None of these firms were founded before 1972 when Pong was developed.5 This dynamism very much corresponds to the above-mentioned concept of ‘culturepreneurs’. The Japanese case is different as most leading firms (12/206) have diversified into videogames within the same or a separate legal entity (like the parent-company venture Kojima; see Helfat and Lieberman 2002 for entry types). As it is typical for new industry emergence, capabilities have been transferred from related industries (Miozzo, Casper, and Storz 2016) such as arcade games, consumer electronics, traditional games7 or business software. Hence, intrapreneurship is the dominant pattern explaining how the industry emerged; a pattern which has been identified also in other new industries in Japan (Eesley, Eisenhardt, and Eberhart 2013; Lechevalier, Nishimura, and Storz 2014). Moreover, 5 out of the 20 Japanese firms were founded before the game industry emerged in the 1970s; Nintendo, for example, even in 1889, Sega in 1940, and Namco Bandai Games in 1955. This industrial structure makes the Japanese case more comparable to the ‘managed’ and quite distant to the ‘entrepreneurial’ economy (Audretsch and Thurik 2001).8 While there are also hundreds of small independent developers in Japan (see for entrepreneurship in Japan Lynskey 2004), incumbents continue to play a core role. To document this, we compare in Table 4 entry patterns of leading Japanese firms with the U.S. Given these company histories, and the adherence to more tighter organisational forms, it becomes less surprising that many executives hold the self-conception of similarity to traditional manufacturing sectors where these organisational designs have been developed though firms did not emerge of them (see Table A3). As one informant at a large studio put it:

5

Mergers and acquisitions are considered. Companies that were liquidated are not included in Table 4. Square and Enix are not counted as two companies, see Table A3 for details. 7 In all these sectors, firms experimented first with software solutions. In arcade games, for example, some machines already included (simple) game software; the same holds true for toys. 8 There has been also a rush of about 200 start-ups since the 1980s in Japan. 6

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Table 4. Leading Japanese and U.S. video game firms: Entry modes. Entry modes Diversifying entrant De novo entrant Founding date Before 1971 After 1972 Sum of leading firms

Japan

U.S.A.

12 8

2 17

5 15 20

0 19 19

Notes: Based on Gamedevresearch 2009 with totally 19 U.S., 20 Japanese and 12 firms from other countries (Canada, France, Norway, Sweden and the United Kingdom). Information on founding dates according to various internet sources. Compare Tables A3 and A4 for more detailed information on Japan and the U.S.A. Data on the U.S. are available on request. With the game Pong, 1972 is counted as the beginning of the video game industry.

It is absolutely normal that our developers are long-term employees [like in the traditional manufacturing sectors], and it is also natural that we draw upon established HRM policies. (General Manager HR; 6)

Another informant argued that … we are not so different from manufacturing. We have a craftsman ethos, working always on quality and innovation. We want to produce new, good and high-quality products. (President, 19)

Such self-comparisons with management in traditional industries, manufacturing in particular, were common in our interviews (e.g. also informants 1, 4, 6). 4.2. Recruitment and placement within internal labour markets HR practices within leading Japanese video game firms complement predominately bounded career paths. All firms maintain standardised recruiting practices, starting on 1 April for the internal labour market, and new recruits make up the core work force. Doing so, they follow the standard recruiting pattern for regular employment found within Japanese firms. Recruitment for the internal labour market is highly selective, as the newly recruited employees are assumed to work on a long-term basis for the game firm. At the same time, in order to gain flexibility, Japanese video game firms have introduced new HRM practices by employing career changers who have the option to switch into the internal labour market after a certain period of time if they meet the skill requirements. Our interviews revealed that the lack of ‘combinative capabilities’ (Jansen, Van Den Bosch, and Volberda 2005, 4) is one reason why some freelancers, even if they possess strong task-specific skills, have not been transferred to the internal labour market. An informant stated that: […] those who have too-strong visions about their tasks cannot be integrated into common projects, and that’s why they do not fit for regular employment […] We need people who are ready to integrate their ideas in the overall picture […] Persons that switch from contract to regular employees have to fit to our firm. Due to the seniority principle and the dense cooperation between senior and junior developers, we learn who fits to the company. (President, 19)

This company therefore has established a series of identity-building policies, relying also on traditional ones like morning exercises. Another informant that represented an exceptional case, in that the firm relied on well-defined task-specific skills when recruiting staff for new teams, noted that:


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We have too much stressed the importance of task-specific skills. The problem we have now is that developers do not share an identity with the firm, have too little commitment, and are not loyal. They are carriers of skills, but don’t see the big picture. The flexibility that we have achieved with the skill-based system is eating away firm-specific skills. The next big task is […] to develop their integrative skills. (Senior Vice President, HR Division; 4)

In the game development process, fluid job descriptions as well as overlapping competences were seen as important mechanisms that enhance the internal coordination of the game’s separate components. None of the firms we interviewed arranged the assembly of game development teams primarily based on skill maps which store for each employee information about his/her task-specific capabilities and the current level of employee competence (Garro and Palopoli 2003). In contrast, most firms design projects with overlapping competencies among the team members. One may argue that this practice creates unnecessary redundancies, but Cohendet and Simon (2007), cited earlier, interpret such ‘creative slacks’ in line with the resource-based view as being potentially beneficial for the organisation as underexploited resources may create ‘common grounds’ for communication and interaction across tasks. An informant from a large developer said: We do not have detailed job descriptions. They become a problem the larger the group is. Also, it plays a role that Japanese employees do not sue over this issue. It is normal that there is no job description, and, as result, there are intense communication processes. (General HR Manager; 18)

An informant mentioned: As the capacity of hardware is limited, we need an intensive coordination within and between firms; we have, for example, to determine how many kilobytes can be used for music, or how sophisticated our graphics shall be. In order to avoid frictions in interactions, we also include, from the beginning of the game’s development onwards, someone of the marketing department. (Leader of a Technical Group; 5)

Another informant of the same company said […] a lot of coordination is needed. There is no end to it. The object of coordination is often diffuse. For example, a character should look more childlike, more Japanese, more like an adult. Also, there are many things where we need a lot of attention towards details, when, for example, we see in a game how the ground comes nearer. This movement looks realistic, but it is not, as often the airplane appears more slowly to the ground than in reality. (General Manager HR; 6)

A further strategy to create ‘combinative capabilities’ is, in the case of large developers, the dispatching of regular employees to other firms in the group to acquire new knowledge and to facilitate internal collaboration. One example is a large publisher where a third of all employees are sent from other departments, for example, from the optical device department to game development (and vice versa). As a result, game developers get a better understanding of how new camera technologies can be used for more innovative video game products (informant 2; see also 6). 4.3. Career paths and ranking systems The dominance of a tighter organisational design is reflected in complementary career paths which resembles more the ‘functional firm’ (Hobday 2000), in particular in the so-called

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ranking systems which are common among large developers.9 Ranking systems are a kind of second career path system where, aside from formal hierarchical positions, a number of hierarchically structured ranks are located in between formal hierarchical positions. These ranks are related to some changes in competences and remuneration, but in particular, they are relevant for status and career prospects. Such career paths are common among large firms in the Japanese electronics and automobile industry (Aoki 1988); however, they have not been documented for the creative industries. We found that ranking systems existed in all large firms we have interviewed. Typically, career paths are made of five ranks, each divided into 10–20 subgrades, so that there are in total at least 50 different ranks (informants 4; 8; 18). As in the dominant Japanese wage– labour nexus, these ranks are related to slightly different payment levels and competences, but not to different jobs, so that two persons may work in the same rank with similar tasks.10 As Aoki (1988) has argued, ranking systems serve as a complementary institution to longterm employment as it incentivises employees to work hard. They also are an important intra-firm institution as tasks within ranks overlap which again potentially provides ‘creative slacks’ (Cohendet and Simon 2007), and additionally stimulate new horizontal links. 4.4. Collaborations and external career paths Besides integration-enhancing intra-firm institutions, there also exist intense inter-firm linkages within the Japanese industry. The density of inter-firm collaborations has put pressure on firms to create new coordination practices. As outlined above, substantial entrepreneurship exists within the Japanese video game industry, but its property compared to more autonomy-based forms of entrepreneurship is very different. Entrepreneurship is often linked to corporate venturing where the employer of a video game firm supports the start-up of a (former) employee, and where the support is mostly withdrawn after a period of time. The practice of corporate venturing was originally established in retailing (norenwake) and later transferred to manufacturing. Across all industries, about 10% of all Japanese start-ups are sponsored spin-offs, a much higher share than in the U.S. (GEM 1999, 8; Storz and Frick 1999). Three of the large video game developers interviewed support prospective game entrepreneurs by providing capital, purchase commitments and value-added services such as legal advice. Normally, the prospective entrepreneur has worked with the corporate parent for several years, often as a key employee. This strategy allows the incubator to build up confidence and trust into the venture, based on a ‘background check’ (Dushnitsky and Lenox 2005, 618) of the founder, his management team, and of product innovativeness. The relationship builds upon informal routines, such as meetings or information exchanges in inter-firm associations. The corporate venture obtains access to complementary assets like national or international distribution networks. The latter is of crucial importance, given that more than 60% of the turnover of Japanese video game firms is generated by overseas sales (CESA 2008, 103). 9

New recruits themselves have a strong preference for being employed in the internal labour market, with access to these career patterns. One informant offers recruits the option to self-select between contracts for regular employees with regular career paths as described below, associated with security, but slow career advancements, or fast career options with lower security, but higher average pay (director HR department, 2). However, the latter option is rarely chosen. 10 Some flexibility has entered the system due to the option of skipping 1–2 grades before achieving the next grade.


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These forms of inter-firm cooperation help to establish coordination devices that speed up game development and equip entrepreneurs with what we called above ‘holistic’ views (Lindbeck and Snower 1999). Due to these capabilities, entrepreneurs are able to combine knowledge across organisational boundaries (Casper and Kettler 2001). In the words of one informant, … we have long-term transactions with our ventures, often over 10 years. We do this as they understand our needs and they are reliable. We speak the same language, and our ventures also understand nuances. In the development process of games, there are many ambiguous things, such as ‘this graphic should express this emotion’, or ‘this should look a little bit more cute’… when we cooperate with our venture, we know that we have good results. In other cases, we often realized problems not until the production process has started. (President; 19)

Another informant said that, … many of the developers with whom we cooperate are spin-outs. This holds true for many developers in Japan. The world of games is small. You know each other. (Member of the Board, Corporate Strategy, 9; compare also informants 6 and 14)

Again, our informants compared this pattern of cooperation with long-standing practices in traditional sectors: We are not so different from the automobile industry. We have detailed milestones and are in dense exchange with our suppliers, but we only give them the concept. They do develop on their own… (Founder and President, 13)

The interviews document that dense external collaboration is seen not only as an attractive career option for former employees, but also for the former employer, as it allows him the access to external knowledge bases as well as their tight integration, but within the existing social relationships and networks. Thereby, inter-firm linkages through spin-offs also extend the internal labour markets of firms. ‘Bounded careers’ still are bounded, but within an extended framework.Table 5 provides a summary with illustrative quotes.

5. Discussion 5.1. Contrasting patterns of HR in video games In order to better contextualise our findings, a short comparison of the HR practices we have documented in Japan with general practices in the U.S. is helpful. To summarise, the Japanese labour market is characterised by strict job security laws that restrict the ability of firms to hire and fire workers (Rebick 2005; Imai 2011). This is in contrast to more lax labour market restrictions in the U.S. Large differences in median employee tenures in Japan compared to the U.S. (11.8 years compared to 4.6 years) have been created by these differences in labor market institutions (BLS 2012; MHLW 2012). Ongoing regulatory changes in Japan have not changed this pattern. Imai (2011) and Sato (2010) have shown that, indeed, career patterns become more flexible, but that these changes take place within the logic of the established system, i.e. within the external labour market. Inter-firm mobility, for example, is in average not rewarded by wage increases (Genda 2011), and mostly affects non-regular employees who do not belong to the internal labour market (Imai 2011; see also Ono 2010). While institutional change takes place and companies tend to become more heterogeneous (Aoki, Jackson, and Miyajima 2007), we think that given the overall stability, in particular within the internal labour market, it is appropriate to assume that the stylised

Career management and organisation of production

Employment model: role of regular/ irregular employees and changers (between and within companies)

Categories and themes of the interviews Recruitment/placement

Skill maps vs. integrative capacities. There is a tension between task-specific human capital which allow for more flexibility and efficiency, and more general firm-specific human capital which allows for better integration among the parts of a game. Companies tend to extend task-specific capital but stress the important role of more general, integrative human capital, acquired for example, by job rotation

Loyality and initiative vs. flexibility and efficiency. Companies tend to provide different labour market segments for different types of workers. Employees of the internal labour market are, in general, attached to better positions. There are exceptions to this rule; this holds true for smaller publishers and developers

Internal vs. external labour market: Japanese video game developers possess strong internal labour market with practically no lay-offs. Flexibility is gained by part timers and contract workers to whom, though, different tasks are assigned

Descriptive summary Stable vs. new recruitment patterns. The recruitment of large established Japanese firms resorts to the top-ranked universities. Recruitment of regular employees takes place once a year (1 April). Regular employees work in the internal labour market. A change of recruitment policies in video game firms could have indicated major changes in HR policies

Table 5. Descriptive summary and illustrative quotes.

‘Our part-timers may, when they are qualified, become contract worker … However, you cannot compare these contract workers with the highly skilled professionals in the US. Normally, they are less qualified than regular workers … Almost everyone in the core group of the development team is a regular employee.’ (Senior Vice President, HR Division, 4) ‘Our new recruits are very loyal towards our firm, despite they are creators. Only very few of them leave our firms. This is different with the changers (chûtô saiyô) who are not loyal and where fluctuation is high. In most cases, demanding tasks are carried out by our freshmen, whereas changers tend to carry out more simple operative tasks’ (Member of the Board, Corporate Strategy, 9) ‘As we are a smaller company, we have many changers. We grade regular workers and changers, and then treat both groups similarly’ (President, 8) ‘We have a severe problem with non-regular employees. They lack the loyalty to the firm. They are qualified in regards to their tasks, but they are like suppliers who produce exactly according the blueprint, but lack any self imitative’ (Senior Vice President, HR Division, 4) ‘We prefer long-term employment. When we employ these people from the university, they first participate in job rotation programmes; they rotate, for example, between programming, sound, planning and visual design.’ (Group Leader Technical Group, 5)

‘We have few dispatchment (shukkô) practices. This takes place within our company group, for example between arcade and console games’ (Senior Vice President, HR Division, 4) ‘We have three groups of employees: part timer, contract worker and regular workers. We have 300 part timers, 500 contract workers, and 1000 regular workers. The regular workers are usually employed throughout their life. There are not many moves in this category’ (Corporate Executive, 3)

Illustrative quotes ‘We employ our freshmen from the top universities. This holds true for both, the administrative staff as well as developers’ (Senior Vice President, HR Division, 4)


Loose cooperation vs. dense networks. Many companies have loose networks to suppliers; when they are qualified, though, cooperation tends to be long-termed, and start-ups (which become then suppliers) are supported

External collabouration/characteristics of inter-firm cooperation

Hierarchical vs. flat networks. Cooperation with suppliers tends to be hierarchical, the IPR are hold by the customer

Seniority-based pay vs performance-based pay. There is a clear dominance of seniority-based pay. Those companies which introduced larger shares of performance-based payments are struggling with many related problems such as perceived unfairness towards administrative staff. Instead, companies recur to established practices like awards or introduce new practices such as more free time

Remuneration, performance and incentives

High potentials vs. long-termed career paths. Some flexibility has entered the ranking system, for example by the option that certain subranks can be skipped. In general, though, career is seniority-based

(Continued)

‘Our casual games are mainly developed by external small firms. These cooperation are often exclusive in nature, and long-termed’ (Corporate Executive, 3) ‘We produce flight simulation games for publishers. Our relation to the most important publishers are stable. I would say, that we work for 5–10 years together…When I outsource parts of the game production, then I outsource 50–60% to former employees who have set us their own company’ (Founder and President, 13) ‘I am working for 200 companies, including most of the large publishers and developers. I spend every evening in the year with going out with them. Our cooperation is longtermed, even if the projects themselves are short-termed’ (Founder and President, 22) ‘When external firms produce games for us, then we hold all the rights’ (President, 7)

An important concern is the problem of fairness. This holds true both for creators compared to other creators, as well as for creators compared to the administrative staff. In particular the administrative staff is very important for the success of a game, but how to evaluate their contribution to a game’s success? (President, 8) ‘We do not have in general investments into small firms, also not in spin-outs of our firm. However, when we support them, we do it by intense cooperation’ (Senior Vice President, 1)

‘Exact job descriptions have the advantage that it is more easy to measure the output per person. However, in reality, it is difficult to draw clear lines between competences as you are in need of broad experiences’ (Director HR Department, 2) ‘In order to balance the advantages of detailed vs broad job descriptions, we aim at a dual system of regular employees with more specialists and more generalists’ (Senior Vice President, HR Division, 4) ‘Excellent young recruits are allowed to carry out their own project. This is, however, not the same like supporting a high potential. We do not offer the option of a fast career track. Instead, we appreciate these persons’ performance with a bonus or an award’ (General Manager Human Resources, 6) ‘We have a ranking system with six ranks. New recruits enter in rank 1. After two years, they achieve in general rank 2. After this, competition increases. The more you advance, the stronger is the competition. In average, there is a difference of at most 10 years within a rank … .Our incentives are long-termed oriented.’ (President, 8) ‘Our basic income is the same for the administrative staff and our creators. In the case of successful products, individuals or teams receive a ‘plus alpha’ –this is not a lot, it is more a kind of appreciation. After the project, we offer our creators one month vacation since they have worked often during the night.’ (Member of Board, Corporate Strategy, 9)

Industry and Innovation 231

Dependent vs. independent start-ups. Inter alia due to the credit-based Japanese capital market, founders find it difficult to procure money. Support by the former employer, in diverse firms, is quite common. At the same time, this makes the linkages between firms more dense

Orientation towards established industries vs. ‘being different’. Most company clearly stated a parallel structure of HRM as well as of production processes to the successful manufacturing sectors. Also behaviour, habitus and general appearance of the leading manager interviewed is very much similar to other large firms (e.g. fixed sitting order, certain dress codes, handing out of business cards). Also younger start-ups tend to imitate this, at least partially, for example in regard to their work organisation

Existence of start-up programs

HRM and organisational design in general

Table 5. (Continued).

‘In order to improve our production processes, we employ many techniques of the manufacturing industry, for example the 5 S policies’ (President, 19) ‘My dream is to have 100% regular staff … but good people often leave to somewhat larger small firms’ (Founder and President, 20)

‘In 90% of cases, the specification of a game that we outsource is very detailed. Only in 10% of cases, developers approach us with their own ideas. In both cases, we hold the rights for the game. Also, in many cases, our directors are present in the external firms; in fewer cases, they work also in our company’ (Director Creative Center, 11) ‘In this sector, strategic investments into suppliers play less a role. Also we do not invest strategically. Though, informal networks to publishers are crucial; we have, for example, regular nomikai (bar meetings) with publisher X’ (President, 7) ‘The cooperation of outsourced games is very intense. This refers to the time table, but in particular to the coordination referring to the specification of the game’ (Founder and President, 13) ‘100% of the development costs are paid by the publishers; therefore, they possess the intellectual property rights’ (President, 14) ‘Norenwake (i.e. to support employees who want to set up their own company) has been quite common. In total, we supported 1220 new firms. We intend to re-activate the system by supporting norenwake as a second career. These employees will be supported with an annual income’ (Group Leader Technical Group, 5) ‘We develop for large developers and publishers like suppliers: They ask for certain products, and we deliver them…this is a kind of substitute for lacking capital’ (Founder and President, 24) ‘Our strategy is to have one to two projects on a supplier-like base. We use this money in order to develop our own, original games’ (Founder and President, 25) ‘We are very much similar to Toyota. Like them, we control the production process. Though, we have to pay more attention to our creators which do not like to be controlled too much’ (Corporate Executive, 3)



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company types of Aoki (1986) of the J-firm on one, and the H-firm on the other side, the former ‘Japanese type’ characterised by more stable career patterns, horizontal coordination mechanisms and strengths in internal coordination, the latter ‘US type’ characterised by more flexible careers and strengths in across-firms knowledge spillover, continue to exist. Hence, differences in the labour market design across systems seem to persist. We have documented the differences in HR practices within Japanese videogame developers (see the Appendix for the U.S.). At the same time, however, it is important to notice that these differences do not imply that there are no commonalities in HR practices across the two countries. We identified important similarities such as the increasing size of projects, or the priority given to game development within teams. We therefore clustered our findings according the themes and topics of our interview, and summarised important commonalities and differences regarding career patterns and HR practices (Table A1). While these commonalities are important as they demonstrate common industry logics, we argue in the following that the differences matter because they tend to be linked to the development of different capabilities. We elaborate this argument in the following section. 5.2. Integrative capabilities and the nature of innovation in creative industries All in all, the organisational pattern in videogames tends to show important institutional changes compared to traditional HR and labour market pattern, but more surprising perhaps is the overall stability of the system which holds true not only for leading developers like Nintendo (Aoyama and Izushi 2003), but also for the videogames industry in general (see also Izushi and Aoyama 2006; Storz 2008). As documented above, many firms interviewed have stressed that their HR practices contribute to better knowledge integration. Our interviewees referred specifically to overlapping positions in the ranking system, to the exchange of tacit knowledge due to long-term interactions, to overlapping skill maps and to spin-offs of former employees, allowing for intra- and inter-firm knowledge integration. Such integrative capabilities are potentially linked to more refined products as employees are capable to integrate knowledge across the core dimensions of a game, i.e. technology, art and storytelling as they have been called by Cohendet and Simon (2007, 587). As our evidence has also shown, these capabilities are linked to firm-specific skills. This became evident when our interviewees noted that switching from the external to the internal labour market requires skills that go beyond task-specific, and contribute to more holistic, firm-specific skills. They stressed the role of intra-firm communication, and incentives for employees to actively contribute to collective innovation efforts. Our findings complement previous research, which has shown that internal labour markets and bounded careers are linked to ‘combinative capabilities’ (Jansen, Van Den Bosch, and Volberda 2005); an argument which we have elaborated in the theory section. However, research has, to the best of our knowledge, neglected that these skills may matter also beyond manufacturing industries.11 Creative industries may be even more in need of integrative capabilities than many traditional industries. For established industries like transportation and machinery, Aoki (1986) and Fujimoto (2008, 2012) have shown that integral capabilities matter and contribute to the competitiveness of Japanese firms in the manufacturing sector. They do so because these industries are made of a variety of parts and knowledge components that 11

Except for a few works on modularity in the service sector, see Miozzo and Grimshaw 2005.

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need to be effectively integrated. In a more recent work, Lechevalier, Nishimura, and Storz (2014) have shown that knowledge integration across existing and new knowledge stocks is also needed within new industry segments like service robots. Our findings build upon this research. Knowledge within creative industries is complex, and probably even more complex than in manufacturing industries. This follows Allen’s suggestion (2013) to consider more explicitly firm’s innovation-related requirements and access to domestic resources. Our interview partners stressed that the integration among the complex parts of videogames are an important challenge for firms. In the dimension of technology, they referred, for example, to components like specific programmes or quality assessment, and in the dimension of art to components like scenario writing, design of interactivity or graphic design. Hence, obviously, complexity goes beyond the integration of ‘hardware’ components, as the literature has stressed for the manufacturing industries, but adds art and storytelling as further key dimensions. Conceptually, Cohendet and Simon’s (2007) statement that videogames are complex and constitute a mix of technology, art and storytelling, can be extended into a simple model on product architectures in creative industries which conceives creative goods as being constituted by different dimensions and components. Extending their argument to the creative industries in general, and linking it to innovation studies in particular, creative goods can be conceived as consisting out of three dimensions, i.e. technology, design (including art) and content (including storytelling); each of them made out of a variety of components. In this simple model, the dimension ‘technology’ refers to new technological principles, parts and materials (Green, Gavin, and Aiman-Smith 1995; Garcia and Calantone 2002) and the dimension ‘design’ to the process of translating technical solutions into products, as well as to the product perspective referring to the external surface of the product (Talke et al. 2009). Both, the technological and the design dimension matter also for creative products. However, if one would restrict innovation in creative industries to these two dimensions, one would neglect an important insight of the literature on creative industries: that content IP (intellectual property) is considered to be the most valuable part of many creative products (Windeler and Sydow 2001; Tschang 2007). We therefore suggest adding ‘content’ as a third dimension. Content refers to what is expressed within the technology and design frame, and refers to the ‘intrinsic cultural, aesthetic or entertainment value which appears linked to their novelty and/or uniqueness’ (Abadie, Maghiros, and Pascuet 2008). Given this complex character of creative products, there obviously exist different patterns of innovation. Innovation may either take place in one of the dimensions, or through tight coordination and coupling across two or three dimensions. In video games, for example, developers may focus on component innovation, by emphasising innovation within a new graphics technology or they may focus on integral innovation by better matching previously existing technology, design and/or content. To be more specific, an integral strategy creates new knowledge through a better coordination across and matching of components that belong to different dimensions. Table 6 illustrates this model, specifying how new knowledge in creative industries may be developed within or across the dimensions technology, design and content. In order to empirically test this model, we collected evidence on game engines. Game engines are software programs that provide the core codes of the game. They are a core component within the technology dimension and are closely linked to the dimensions of design and content as they provide the basic framework for the art and the storytelling dimension; i.e. they allow for certain characters, backgrounds or movements. Game


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Table 6. Product architecture and integral innovation: dimensions and components of videogames.

engines may be either bought on the market, in which case they are standardised, or they may be developed in-house. Standardised game engines have the advantage of being lowprized, in particular, they do not need firm-specific knowledge as these game engines are standardised within the industry. In the case of graphic design, for example, they offer a set of options which may, depending on the version, be adapted and extended, though the extensions stay within the options that have been ex ante designed. In contrast, in-house game engines allow for specific graphic designs and storytelling that are not contained in standardised game engines. Hence, the strategy to ‘make or buy’ a game engine is directly linked to the way how characters, their movements or the background can be designed, and, more importantly, how these different components are integrated. We find that Japanese videogame firms tend to rely substantially more on in-house game engines than firms in the U.S. (see for method and results Table A2). In other words, the tendency to rely on different types of game engines reflects differences in the way of how knowledge across dimensions and components may be integrated.

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The different ways how innovative videogames are created can help us understand why we do not see a new equilibrium of career patterns in creative industries, and not a common institutional framework as it has often been assumed. It also helps us to see why different HR practices across national innovation systems (as listed in Table A1) might occur: they seem to be linked to a different nature of innovation within videogames. Once bounded career patterns have been established – a process, which we argued, was triggered by diversification strategies – they could be linked to existing practices (as we saw in the cooperation with spin-offs of former employees), and to specific innovative paths. While it goes beyond the scope of this paper to explain why Japanese and U.S. videogame firms make obviously use of different innovation strategies, institutional theories provide important and complementary explanations. The management as well as the economic literature stress the role of mutual expectations and beliefs (Greif and Laitin 2004; Aoki 2011; Crossland and Hambrick 2011) as factors inducing systemic stability; the varieties of capitalism literature (Hall and Soskice 2001) and its extensions (Whitley 1999; Amable 2003), including recent works (Kalinowski 2015; Meuer 2015; Nölke 2015; Tassey 2015) identify institutional complementarities as being at the core of these equilibria. The technological regime literature builds up on the complementarity approach, arguing that not only institutional complementarities exist, but also these institutional arrangements and their technological outcomes may be complementary to and reinforce each other (Malerba 2007). Reinforcement takes place when companies learn which institutional resources and technological show a good match. For Japan, we observed that most companies have diversified from related industries into the videogame industry. Hence, the sector of origin is, except Nintendo with its focus on console development and Sony Computer Entertainment on electronics (see Tables A3 and A4), not related to the manufacturing industries for which Aoki (1988) and Fujimoto (2008) have shown that companies possess strong integrative capabilities. The competitiveness of Japanese videogame firms seems to be grounded in inter-sectoral learning capabilities which have resulted in the ‘import’ of integrative capabilities from traditional sectors into the new videogame sector. To put it differently, we find the argument of the technological regime approach convincing, suggesting that the nature of innovation is in need of a specific institutional arrangement which, in the case considered here, Japanese videogame developers have strategically reinforced. 5.3. Limitations and further research In order to obtain preliminary data on a creative industry whose institutional properties differ from a boundaryless career model, this study focused on field research within the Japanese video game industry. The interviews have been carried out with senior executives. Based on these interviews, we could demonstrate that Japanese videogame firms are characterised by bounded career patterns and an emphasis on internal labour markets, though small firms are much more constrained in developing them. However, as we did not interview employees it may be that these stable patterns are associated with practices not documented here such as excessive overtime in order to enhance one’s career within the internal labour market. Also, it is important to notice that the stability of internal labour markets is complementary to an increased flexibility of external labour markets; a development which is expressed, inter alia, by an increasing share of freelancers as outlined above


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(Section 5.1). Later research should complement this perspective and relate our results to the here documented HR patterns. Further, there are important anthropological and cultural studies about the cultural context of business practices which we, except works on international management which explicitly take cultural values into account (Crossland and Hambrick 2011), could not sufficiently consider. We are aware that cultural constraints may be an important factor causing the stability of institutional systems in general, and business practices in particular. Such complementing approaches would be highly valuable in making our findings more robust. Finally, it should be borne in mind that this is only one industry in one country, and that the findings may be sensitive to industries and the particular firms studied. Future research should thus explore these questions in other contexts. As is generally known, there is a trade-off between cross-organisation samples that are broadly generalisable and single or few organisation samples that can have richer data and provide a high level of detail.

6. Conclusion Our objective was to show that Japan, being home to highly innovative video game firms, builds upon HRM patterns different from the well-documented case of U.S. video game firms. Our findings raise substantial doubt and even disconfirm widely held beliefs about temporary organising in creative industries. We found bounded careers patterns in Japan, strongly divergent from boundaryless career patterns in the U.S. as it is documented in the literature. Nevertheless, both countries are performing well in the video game industry. While Japan and the U.S. each have major video game sectors, they remain closely wedded to the major national norm of institutional configurations. The differences in the institutional systems seem to be not only the result of mutual expectations and beliefs or institutional complementarities, but also of mutual reinforcement processes between the institutional set-up such as HR practices and bounded careers, and the nature of innovation. Using game engines as an indicator, we could show that Japanese firms tend to rely more on proprietary game engines, which allow for a stronger integration across important components within a game. In contrast to research that has highlighted ‘the organisational limits of established firms to generate innovations internally’ (Dushnitsky and Lenox 2005, 617), our findings stress the potential role of incumbents in generating innovation, under the condition that the organisational design is linked to the creation of integrative capabilities. This finding seems to reinforce the need to avoid an over-deterministic institutional analysis that attempts to ‘read off ’ the organisation of companies from institutional architectures, and instead explore their ability to experiment, but within an institutional environment that is constraining.

Acknowledgements We wish to thank the German Research Foundation (DFG; 860/1-1), the Japanese Institute for Labour, Policy and Training (JILPT) and the Japan Society for the Promotion of Science ( S12704) for their support of this study. Earlier versions of this paper were presented at the workshop on “The emergence of new industries. Between path dependence and path plasticity” at the Collegio d’Alberto in Turin, at the Stanford Project on Japanese entrepreneurship (STAJE)/ Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE) at Stanford University, at the Japanese Management Seminar at the Cardiff Business School, at the seminar on Political Economy of Institutional Change

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at the Paris School of Economics/ La Sorbonne, at the Academy of Management Meeting and at the research seminar at the IIR of Hitotsubashi University. The authors thank all participants of these conferences. We appreciate feedback on drafts from Matthew Allen, Hiro Izushi, Mark Lehrer, Lars Schweizer and Jörg Sydow. The authors would like to thank Moritz John for the provision of data, and Elssy Kiradjieva for editorial support. The comments of two anonymous reviews are gratefully acknowledged. Both authors contributed equally, and our names are listed alphabetically.

Disclosure statement No potential conflict of interest was reported by the authors.

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Appendix The literature on new industries within the U.S. has documented a dominance of boundaryless career patterns, and related them to knowledge spillovers effects within the regions in which these new industries are clustered (Almeida and Kogut 1999; Breschi and Lissoni 2003; Owen-Smith and Powell 2004; Casper 2007; Corredoira and Rosenkopf 2010). The video game industry is an extremely strong example of this pattern, employing a market based pattern of industrial organisation similar to that previously documented within the biotechnology and software industries (see, e.g. Henderson, Orsenigo, and Pisano 1999 for biotechnology and Mowery 1999 for software). To document this pattern within the video game industry, we draw primarily on the secondary literature, published interviews with well-known video game programmers and designers, as well as information obtained from attending the 2013 Game Developers Conference in San Francisco. Our review of the U.S. industry is relatively brief, as our goal is to develop a contrast with the starkly different pattern of HR organisation within the Japanese industry. Throughout its history the U.S. video game industry has been populated by entrepreneurial startups. The industry has been organised around a market-oriented pattern of industrial organisation emphasising high labour market mobility. Several factors helped consolidate a market-oriented pattern of industrialisation within the U.S. industry. As the industry emerged through the 1970s and 1980s a wave new entrants (often linked to the game Pong in 1972), lead by Atari, captured most market share within the U.S. industry (see Donovan 2010). A first factor was the inability of Atari and other early entrants within the console industry to assert control over rival studios launching third party games for consoles they manufactured. A significant event in the history of the U.S. video game industry was a lawsuit filed by Atari in 1980 against Activision, a company founded in 1979 by a team of former Atari programmers. The lawsuit attempted to prevent Activision from releasing game cartridges for the, at the time, dominant Atari 2600 console without a licence to do so from Atari. Activision won the lawsuit, precipitating widespread new entry into the industry, the creation of a flood of third party cartridges being released for the market Atari 2600 game console. While later entrants to the U.S. console market have been able to develop stricter intellectual property and licensing arrangements needed to better control access to consoles by third party developers, the existence of a large market for third party game developers has remained an important element of the U.S. industry. The success of Activision and other third party developers has lead start-ups within the U.S. to strongly support ‘open’ gaming platforms, ranging from games for personal computers during the 1980s and 1990s to a more recent wave of start-ups focused on development game software for internet based and mobile gaming. More broadly, Atari’s failure in this regard illustrates how market-oriented contract law and competition policies in the U.S. helped shape the industrial organisation of this industry. A second factor supporting market a based pattern of industrial organisation is the relatively low capital requirements needed for entry into many game software markets. Most video games written during the 1977–1989 period were created by individuals or small teams. While prominent firms such as Atari and Activision have received venture capital, most start-up developers were initially self-funded or, in cases where industry veterans were involved, acquired financing from publishers, who frequently provide up-front funding in exchange for rights to publish one or more games developed by the new studio (Donovan 2010). Low entry barriers and strong opportunity conditions have favoured very high entry and exit of firms within the sector. While definitive research on entry and exit within the U.S. video game industry has yet to be conducted, archival research by computer game enthusiasts list dozens of developers active in start-ups during the industry’s first decade.


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More recently the game industry has bifurcated between large development houses such as Electronic Arts, Valve or Blizzard, which focus on so-called ‘AAA’ games with budgets of tens of millions of dollars and development teams of several hundred individuals, and a burgeoning entrepreneurial sector of smaller ‘independent’ studios that focus primarily on software for mobile and social markets. This independent games sector has become a hotbed of both design and business model innovation, particularly in the so-called ‘free to play’ sector. A few social or mobile games that were initially developed by small start-ups, such as Zygna’s Farmville or King’s Candy Crush Saga, have generated over a billion dollars in revenue, attracting over a hundred million users each (Kanal 2013; De La Merced 2014). The market-centred pattern of industrial organisation that emerged within the U.S. industry has emphasised human capital – particularly of talented programmers and game designers – as the central asset of many firms. As such, the U.S. video game industry has become a prime example of a sector whose competitiveness is driven by knowledge recombination linked to boundaryless careers. Within the U.S. video game industry small teams of developers, if disgruntled due to personality conflicts, a perceived need for more creative freedom, or any number of other reasons, could leave their present company to launch a start-up or take employment within a competitor. A key demonstration effect in the early history of the industry was the founding of Activision by a group of Atari programmers who were upset that Atari refused to provide ‘credits’ at the end of their console games listing the names of programmers who created the game. Activision’s success (the firm achieved $66 million in revenues within three years of founding) spurred at least two other teams of developers to leave Atari in the early 1980s to found venture capital backed start-ups (Donovan 2010, 90–93). Another prominent example is Blizzard Software, a tremendously successful developer which has changed ownership several times since its founding in 1991. Over Blizzard’s history at least 11 firms have been founded by teams of programmers leaving the firm (see e.g. Kain 2012). While labour market flexibility conduces towards entrepreneurship and innovation, it is also important to point out that it also facilitates the adoption of ‘hire and fire’ as a strategy of larger firms. As the development costs of ‘AAA’ console games have soared, some large developers, such as Electronic Arts, have routinely hired large cohorts of employees to facilitate the ramp-up of ‘AAA’ console games, only to lay-off most of the new employees after the game launches (Hyman 2009). Labour market mobility has also helped fuel the market for acquisitions within the U.S. industry. Particularly within the mobile sector, large publishers have acquired developers of successful mobile properties to obtain intellectual property over putative new game franchises. Large publishers, such as Zynga, or once again Electronic Arts, have quickly closed down development studios after acquisitions, in some cases after spending hundreds of millions of dollars on these acquisitions (see, e.g. Ligman 2013). These examples again support the general finding that market-oriented industrial organisation, and in particular labour market flexibility, are key elements within the U.S. video game industry.

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Table A1. Video game development: the Japanese case in comparison to existing evidence on career patterns in the U.S. Categories and themes

Common practices

Differences of practices

Employment model

• Within larger developers/publishers, preference for stable employment (with different sizes of the internal labour markets, see column on the right)

• Preference of stable employment in all firm sizes in Japan • Manufacturing sector as orientation in case of Japanese developers • Practically no lay-offs in Japan of regular employees; employees leave the company mostly because of more attractive jobs in larger companies in contrast to the U.S. where project teams may be dissolved, or where a new company is started together • High dynamic in the U.S. due to important role of new entrants • Social capital and ‘match’ due to personality important for employment in the internal labour market of Japanese developers

Recruitment

• Often via individual network

• Japan: strong preference for new recruits; U.S.: preference for experienced developers • U.S.: stronger focus on external educational institutions, fairs and conferences

Organisation of production

• Increasing size of projects since the industry beginnings • Development within teams

• Japan: intensive collaboration with top suppliers, in particular when they are start-ups of former employees • Intensive internal collaboration by integrating different functions from the development onwards (for example: marketing – game design) • Dispatchment within larger firms across functions in Japan • U.S.: more advanced standardisation practices

Career management

• Only high skilled developers have access to the internal labour market • International careers within large suppliers

• Fast promotion of high potentials in the U.S.; development plans for these individuals • Role of seniority in Japan, though flexibility has been introduced; career development is slower • Ranking system in Japan; overlapping positions with similar tasks • Compared to manufacturing, Japanese ‘changers’ have more career options; but often there is still a divide between careers available to changers and to regular employees • Important role of non-financial incentives among Japanese publishers, in particular via individual/team-based awards

Remuneration

• Determined by position, individual and collective performance • Bonuses • Stock options

• Japan: performance orientation; high share of seniority, in particular in the lower ranks; stock options mostly only for top management • Remuneration system varies in Japan between regular and irregular workers

External collabouration

• Vertical integration of development, publishing and distribution

• Job rotation of Japanese developers among firms (shukkô) in some cases • Like in the U.S., supplier relations in Japan are more shorttermed, except of cases of core competence/ strategic decisions (e.g. series) or former temporary investments into start-ups

Source: Interviews in Japan; Secondary Material on the U.S.; see methods.


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Table A2. In-house game engines by Japanese and American developers. Country Japan U.S.

Absolute number inhouse game engines 33 14

Absolute number of standardised game engines 17 36

In-house game engine (in %) 66 28

Standardised game engine (in %) 34 72

Notes: 100 randomly selected game engines documented in MobyGames between 1999 and 2009 have been selected. In an additional analysis, based on MobyGames, we classified the game engines into in-house and standardised game engines.

Table A3. Japanese top developers: entry modes. Game developers ranking 2009 31 12 26

Founded 1986 1979 1989

Year (entering-game industry) 1986 1985 1989

Hal Labouratory Intelligent Systems Koeia Kojima Production

11 44 18 19

1980 1984 1978 2005

1980 1984 1982 2005

Konami Marvelous Interactiveb NamcoBandai Games, Inc.c Nintendo Company Ltd. Omega Force SCE Japan Studios (Sony) Sega Square Enix Holdings Co, Ltd.

6 40

1969 1997

16

Name Atlus Capcom Co, Ltd. Game Freak

Success Corporation Tose Treasure Yuke’s Future Media Creators

1985 1999

Sector when founded Video games Arcade machines Self-published a video game magazine from 1981 to 1986 under the same name; in 1989 de novo entry in video games Video Games Video Games Business Software Video Games (Subsidiary of Konami/Jukebox distribution) Jukebox distribution Music, animation

Entry type De Novo Entry Diversifying Entry De Novo Entry

Diversifying Entry Diversifying Entry

1955

1982

Toys

Diversifying Entry

1

1889

1977

Playing cards

Diversifying Entry

45 38

1997 1993 1980

Video Games Video Games (Subsidiary of Sony/Electronics) Slot machines

De Novo Entry Diversifying Entry

37 27

1997 1993 (1946) 1940 2008

1992

Enix: Advertisement

1986

Square: Video Games

29

Enix: 1975 Square: 1986 1978

1982

Slot machines, arcade machines

Enix: Diversifying Entry Square: De Novo Entry Diversifying Entry

33 50 41

1979 1992 1993

1984 1992 1993

Arcade machines Video Games Video Games

Diversifying Entry De Novo Entry De Novo Entry

De Novo Entry De Novo Entry Diversifying Entry Diversifying Entry

Diversifying Entry

Notes: Selection of firms based on the Game Developer Research Ranking (Gamedevresearch 2009). In the Game Developer Research Ranking, Square and Enix are counted as two entities. Sony Computer Entertainment San Diego was not counted. Kojima belongs to Konami. According to Game Developer Research, the ranking is based on 600 interviews with industry experts. The magazine has been closed in 2013. Source: Own website research. a Now: Koei Tecmo Holding. b Now: Marvelous Inc. c Bandai Namco Games Inc.

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Table A4. U.S. top developers: entry modes. Game developers ranking 2009 14 2 17 9

Founded 1986 1991 1998 1994

Year (entering-game industry) 1986 1991 1998 1994

Epic Games Firaxis Games Harmonix Music Systems Insomniac Games Maxis Monolith Productions Mythic Entertainment

33 35 20 15 24 46 34

1991 1996 1995 1994 1987 1994 1995

1991 1996 1995 1994 1987 1994 1995

Neversoft Entertainment Ready at Dawn SCE Studios San Diego

26 30 48

1994 2003 2001

1994 2003 2001

Treyarch Valve Software Vicarious Visions Visual Concepts Volition

10 7 23 43 36

1996 1996 1990 1988 1996

1996 1996 1990 1988 1996

Name Bethesda Softworks Blizzard EA Redwood Shores EA Tiburon

Note: see Table A3.

Sector when founded Video Games Video Games Video Games (subsidiary of EA) Video Games (has been founded as Tiburon Entertainment; later acquired by EA) Video Games Video Games Video Games Video Games Video Games Video Games Video Games (merged from two smaller development studious) Video Games Video Games Video Games (subsidiary of Sony) Video Games Video Games Video Games Video Games Video Games (emerged from a split-up of a former video games company)

Entry type De Novo Entry De Novo Entry Diversifying Entry De Novo Entry De Novo Entry De Novo Entry De Novo Entry De Novo Entry De Novo Entry De Novo Entry De Novo Entry De Novo Entry De Novo Entry Diversifying Entry De Novo Entry De Novo Entry De Novo Entry De Novo Entry De Novo Entry