Shopping for Buyers of Product Development Expertise:: How Video Games Developers Stay Ahead

This paper draws upon the strategy literature to provide a number of insights into what constitute the critical external drivers influencing strategy and the nature of the internal resources firms require to sustain their competitive advantage. The paper reviews the market- and resource-based views of the firm and argues that the activities of buyers directly and indirectly contribute to the innovation process of a firm as ‘signallers’, ‘revealers’ and ‘collaborators’. Examples are drawn from the video games industry which has particular constraints coupled with buyer and innovation demands arising out of fast-changing technologies, markets and resources that have ever-shortening shelf lives; namely, characters, title franchises and gaming/technology platforms. We suggest that, for the video game industry, buyers particularly value firms’ dynamic capabilities, specifically those capabilities that contribute to product creation and product development capabilities of ‘super developers’ over other considerations.