Playing and Paying on the Internet: Adoption Determinants for Spanish Gamers

By Barbera, Rafael A.; Doncel, Luis Miguel et al. | Journal of International Business Research, January 2006 | Go to article overview

Playing and Paying on the Internet: Adoption Determinants for Spanish Gamers


Barbera, Rafael A., Doncel, Luis Miguel, Sainz, Jorge, Journal of International Business Research


ABSTRACT

The online game industry has been one of the fastest growing businesses over the last few years. It is estimated that in 2008 online gaming will be the leader in Europe in terms of content spending. The purpose of this paper is to explore the drivers behind online game adoption among Internet users, focusing on the gamer's profile and Internet behavior based on data from an online survey. Our results show that purchasing decisions are irrelevant in terms of the users' personal characteristics and are more focused on the user's prior gaming profile. The introduction of new technology does not change the users' behavior, but it does allow current users to access that content more easily.

INTRODUCTION

Online gaming has been one of the fastest growing businesses over the last few years on the Internet. In Europe, online gaming ranks number two in consumer spending, only behind adult content and well ahead of the third ranked category (Jupiter Research, 2004a). The appearance of multiplayer games like Counterstrike or Everquest, the increasing presence of broadband connections, and the development of new mobile systems that allow for faster downloads of such games have allowed the category to maintain its success as a content aggregator in terms of usage and revenue.

Projections are also bright for the business. Jupiter Research (2004b) estimates that in 2008 online gaming will be the leader in Europe in terms of content spending, representing 28% of a market expected to be worth 2.3 billion [euro], surpassing adult content and music downloads. Much of the attention on the literature in this area has focused on issues related to piracy and copyright protection (see, for example, Zhu, 2001; Zhang, 2002; Ting and Wildman, 2002; Domona and Yamazaki, 2004; Oberholzer and Strumpf, 2004) while little to no attention has been paid to consumer behavior.

The online game business can be divided up mainly into three areas: multiplayer online games (80% of the market), game downloads for different platforms (9%) and games on demand that, although currently only representing a scarce 2.6% of the market, is growing strongly as new technologies and broadband access expand. A new area is also developing with the utilization of the web to pay for and download content for mobile terminals and game consoles. Regardless, all of these are influenced by strong network externalities. As gamers increase in number, a larger user base allows users to have more "fun" while representing for the industry an increased competitive advantage on complementary products suitable for marketing and transactions on the web (Liang and Huang, 1998).

As Majumdar and Venkataraman (1998) point out, network effects literature focuses on technology adoption decisions, technology compatibility decisions and decisions among competing incompatible technologies. In this paper we will focus on the first point, the decisions taken within the games market, as no previous studies have been conducted on why Internet users choose to start paying for content online.

The purpose of this paper is to explore the drivers behind online game adoption among Internet users, moving away from most of the studies on the issue that have focused on security, both in payments or privacy concerns as a driver behind the online purchase decision (Miyazaki and Fernandez, 2001; Furnell and Karweni, 1999; Baker, 1999; Liang and Huang, 1998) or research on the profile and Internet behavior of the game adopter on the Internet by using data that is rarely available to researchers.

Understanding the factors that drive that adoption and the consumer characteristics is important. As Internet, and specially broadband, penetration grows, companies like Sony, EA or Valve should focus their efforts on the users most likely to pay to play on line, promoting a more efficient usage of their marketing budgets.

The paper proceeds as follows. …

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