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Archiving the Creation Processes of the Video Game Industry

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Incremental Innovation

27 October, 2009 (10:46) | Literature Review | By: admin

Tschang, F. Ted, “Balancing the Tensions Between Rationalization and Creativity in the Video Games Industry,” Organization Science 18, no. 6 (2007): 989-1005.

In this 2007 article, F. Ted Tschang argues that increased financial success within an industry often results in an increased hesitancy toward creativity, using the U.S. video game industry as an example.  As he notes, “product innovation usually gives way to efficiency considerations…[and] the market locks into a specific, dominant design that is based on certain firms’ superior technology, productivity, fit with the market, and capabilities.”  In other words, as the industry begins to notice growing potential for financial gain, a more rational focus on productivity overtakes the initial creative tendencies that provided for these gains. 

Thus, a tension arises between the financial desires of the companies within the industry and the creative desires of the individuals working in those companies.  In order to appease these creative needs and also differentiate their products, each video game development studio allows for what Tschang calls “incremental innovation, which involves minor changes to the products’ components.”  As in the film industry, these incremental innovations are frequently made within a particular genre.  For example, games like Doom, Quake, and Duke Nukem 3-D were part of a radical innovation in computer gaming that resulted in the formation of a gaming genre called “first-person shooters.”  In the years following this initial innovation, various studios have developed incremental innovations of this genre with games like Goldeneye, Half-Life, and Halo, which introduce new weapon ideas, creature types, and landscapes but are ultimately unwilling to stray too far from the basic gameplay forms and visual styles that made previous entries in the genre so successful.

Clearly, such a development strategy does not permit radically creative thinking.  Each development studio recognizes a certain number of genres as being consistently successful and requires its creative branches to work within those genres, cutting off the potential for wholly unique ideas from the very beginning.  Then, while creating games that fall within one of these genres, game designers are only allowed, at best, to develop one or two major gameplay innovations, just enough to assure consumers that they are buying a new experience but not revolutionary enough to scare those consumers away.   

As Tschang notes, these tendencies make important the creation and acquisition of intellectual property.  In particular, two kinds of intellectual property are highly sought after in an industry reliant upon incremental innovation: (1) a coveted game engine or other piece of often-used technology and (2) a license for the use of a pre-sold property (popular film, tv, or book franchises, for example).  Because incremental innovation does not allow for the creation of a new graphics engine for each new game, each genre has essentially settled upon a proven piece of technology for use in most games.  Returning to the first-person shooter genre, Epic Games’ Unreal Engine, after wowing developers and consumers in the original Unreal games for which it was made, other studios began to use the engine in their own games.  Thus, while the development of game engines remains stagnant within each genre, Epic, through its ownership of a frequently used engine, enjoys continued financial gain.  A license for the rights to a pre-sold franchise also has proven to be one of the easiest ways to differentiate a particular products from others in its genre without requiring major innovation.  A studio can make essentially the same game it has made before, but this time with characters from Harry Potter or Spider-man, and market it as an entirely new product.

Ultimately, this industry tendency toward incremental innovation means that the products independent game studios, working outside of the profit-driven rationalization of the major studios, are absolutely crucial if the industry is to continue making major creative innovations.  With the major studios having hit upon “what works” and choosing to focus entirely on those genres and gameplay elements, it is left to the independent studios to drive industry creativity forward.  As Tschang notes, individuals who feel their creativity is being stifled within the major studios frequently branch off to form their own, independent studios, where fresh gameplay ideas can perhaps result in the creation of an entirely new video game genre, which will then be picked up and expanded through incremental innovation by the major studios.

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