Annals of Business Administrative Science
Online ISSN : 1347-4456
Print ISSN : 1347-4464
ISSN-L : 1347-4456
Exploitation Reduces Novelty
An Empirical Analysis of the Japanese Video Game Industry
Takeaki WADA
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2011 Volume 10 Pages 1-12


Firms accumulate knowledge through product development activities such as efficient product design, various experimental data, and know-how of project management. By exploiting this knowledge, firms are able to improve product quality, reduce cost, and shorten the development lead time. The more firms accumulate knowledge, the more they are able to gain competitiveness by exploiting their knowledge. However, because of efficiency gained by exploitation, firms can sometimes excessively exploit their knowledge, thus making their products too similar to and less attractive than earlier products and, as a result, lose competitiveness. In this paper, we employ a time series analysis to show that excess exploitation of know-how reduced product creativity in the Japanese video game industry.

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© 2011 Global Business Research Center

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