Vili l game ecosystems


Published on

Published in: Economy & Finance, Technology
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Vili l game ecosystems

  1. 1. Game Ecosystems Business Model Innovation in the DigitalEntertainment Sector: Implications for Policy Dr Vili Lehdonvirta LSE Innovation Co-Creation Lab Twitter: @ViliLe
  2. 2. Why Games?—  $65 Billion industry, bigger than music or cinema—  Digital game companies are pioneers in innovations that drive today’s digital economy —  Games have contributed to the worldwide development of computer hardware more than any other application—  What can we learn from business model innovation in the Finnish game industry?
  3. 3. Finnish Game IndustryTurnover 165 M€ – 90% from export (2011)—  Represents ~0.25% of Finlands total exports—  CAGR 22%! (2004-2011)1300 employees (2011)—  Average employees per company: 16—  Young males
  4. 4. Business Model Innovation 1: Digital Distribution Source: Neogames, The Finnish Game Industry 2010-2011
  5. 5. Business Model Innovation 1: Digital DistributionHurdles:1.  Fragmented e-payment infrastructure2.  Fragmented e-commerce regulation3.  Fragmented taxation systemsIntegrated distribution platforms (App Store, Steam)solve this – but at the cost of 30% of revenues toCalifornia→ Policies aimed at creating a seamless digital market
  6. 6. Business Model Innovation 2: Virtual Economies Consumer sells Consumer buys content to other Virtual Currency consumers to earn Consumer uses money/VC Virtual Currency to buy content / Developer redeems Consumer earns Creates content Virtual Currency Virtual Currencythrough gameplay for earnings from or ads publisher—  From credit card payments to stored value and micro- payments (virtual currency)—  Users and third-party developers not only consume but also create value (user-created content, microwork)—  Users and third-party developers can redeem virtual currency for real money
  7. 7. Business Model Innovation 2: Virtual EconomiesRegulatory hurdles:—  Virtual currencies’ unclear regulatory/tax status (closed loop/open loop, accounting rules, breakage, ...)—  Micro-employment not recognized in employment regulation—  Electronic payment infrastructure does not facilitate payments back to consumers —  PayPal solves this, but at the cost of ~5% of earnings to California→ Explicit policy development on virtual currencies and microwork
  8. 8. Business Model Innovation 3: Crowdfunding
  9. 9. Business Model Innovation 3: CrowdfundingRegulatory hurdles:—  Donations-based crowdfunding —  Regulations designed for physical donations —  Global digital online donations—  Investment-based crowdfunding —  Heavy regulation of investment offers —  Number of investors can be 10,000s→ Policies aimed at frictionless donations and micro-investment
  10. 10. Finnish Game Ecosystem—  The biggest business model innovation in the Finnish game industry is the ecosystem—  The ecosystem is vital for talent, technology, investment and innovation—  Consists of developers, universities, industry events & organizations, informal networks, angel investors, public R&D support, gamers, gamer events, media—  Most important component is game culture: high acceptance of digital gaming in Finnish society & history of hobby game programming competitions→ Policies aimed at promoting grassroots digital culture!
  11. 11. SummaryPolicies needed for:—  Seamless digital market—  Virtual currencies—  Digital micro-employment—  Digital donations & micro-investments—  Game culture! Thanks for listening! Twitter: @ViliLe