Strategic timing of entry: evidence from video games

This paper investigates how video game publishers’ choice of game release date is affected by the expected level of competition within the game’s product niche. We identify game niches by genre, age-appropriateness, console system, a release cohort, and publisher. First, we show that games are more likely to be released so as to avoid weeks when their niche already faces competition. Next, we show that consumer substitution across games is stronger within most of the dimensions describing product niches. Sales volumes decay quickly after the opening weekend, so at any point in time, a niche will typically be served by few current titles. From this, we calculate that delaying game release 1 week yields substantial increase in revenue for a video game facing higher-than-average competition.