Coopetition in the Video Game Industry: Structures, Strategies, and Outcomes

The master's thesis work is aimed at analyzing the phenomenon of coopetition, i.e. a strategic alliance agreement between two or more companies which blends elements of both cooperation and competition, in the videogame industry. Co-opetition is a phenomenon that has always characterized the industry and has helped to shape it and made it become what it is today. The final objective of the work is to understand and evaluate how different typologies, structures and characteristics of coopetition in the videogame industry lead to different outcomes in agreements between companies. In the first part of the thesis, the theoretical background, the phenomenon of co-opetition will be treated initially in its most generic form, seeing how it fits within theories such as game theory, and more generally within the global framework. The second part of the theoretical background will analyze the phenomena in a more practical way, and themes such as opportunity costs for strategy implementation will be treated, along with some practical situations in which the strategy is applied in different ways. Finally, an in-depth look at the video game industry as a whole will be covered in order to give the reader more specific knowledge about the industry. All this will help give us a complete background to deal with the second part. The second part of the thesis will be an analysis of five case studies, treating different coopetition strategies, always within the videogame industry. The first will deal with Steam, Valve's famous online marketplace; the second, will be a study of Unreal Engine, a game engine that Epic Games grants to other developers; the third one will deal with a more particular coopetition case, which did not finalize in the commercialization of a product, i.e. the collaboration between Nintendo and Sony for the development of a new console, the SNES CD-ROM, spiritual heir of the first PlayStation; the fourth case study will analyze a mobile videogame collaboration, between Nintendo and DeNA; finally, the fifth one will treat a model of internal coopetition, concerning Ubisoft. We will then discuss the history, causes and consequences of these collaborations, analyzing how they interface with the theory analyzed in the background. Finally, in the last part, the various case studies will be compared, so as to be able to assess the presence of similarities and differences between them, seeing how these contributed to the success or otherwise of these agreements, and what the specific weight of each may have been.