The Impact of Multimarket Competition on Innovation Strategy: Evidence from the Korean Mobile Game Industry

Abstract

Multimarket contact (MMC) refers to the situation in which more than two firms simultaneously compete with each other in multiple products and/or geographical markets. Most studies on MMC have explored how the market overlap creates “mutual forbearance”, which lessens the intensity of rivalry. While prior studies have mainly focused on how reduced rivalry from MMC influences market-related decisions, only a few have paid attention to its impact on innovation activities. The purpose of this research is to explore how multimarket competition influences different stages of innovation. Specifically, we focus on three stages of innovation: Content development, commercialization, and protection of IPs (Intellectual Property). This study is conducted as an exploratory case research based on the in-depth analysis of two leading Korean Mobile game companies. Based on our findings, we explain how mutual forbearance and observability of the rival’s competitive action influence the choice of strategic decisions across different stages of innovation.

Keywords

• multimarket contact
• mobile game industry
• innovation strategy
• competitive dynamics