“Dedicated asset” value driver is implemented both in movie and video game industries through arranging partnerships with distribution companies on the local markets.

For this purpose, movie publishers license the rights of exclusive distribution to local companies with an established network of exhibition channels or create a distribution subsidiary in the foreign country. That is how “the Big Six” is presented on the Russian motion picture market (Booker's Bulletin, n.d.):

- Walt Disney Studios Sony Pictures Releasing (WDSSPR): a joint venture of The Walt Disney Studios and Sony Pictures for distribution on the Russian market.

- 20th Century Fox CIS: 20th Century Fox subsidiary for distributing movies in the Commonwealth of Independent States (CIS).

- Central Partnership: Russian company that has exclusive distribution rights from Paramount.

- Karo Premier: Russian company that has exclusive distribution rights from Warner Bros.

- UPI Russia: Universal Pictures subsidiary.

Similarly, video game publishers frequently implement the “dedicated asset” competitive driver by arranging long-term relationships with national distributors. One of the major examples in the United States is Alliance Distributors that specializes in distribution of physical copies produced by Electronic Arts, Warner Bros. Interactive Entertainment, Ubisoft, Take-Two Interactive Software, Square Enix, Konami and Capcom (Brightman, 2017c). On the European market one of the largest specialized distributors is Koch Media, which handles the boxed releases for Sega and Square Enix. The company uses its own logistics infrastructure for Germany, Spain, Italy, Austria, and Switzerland and works as Nintendo's preferred distributor in the United Kingdom (WholesGame, 2015).

The substantial peculiarity of publishing and distribution of video games is based on the two-sided characteristic of the market and indirect network effects that are absent from the movie industry. As the market consists of software (games) and hardware (consoles) parts, three platform providers that manufacture game hardware have opportunities to dominate the market through “network externalities” value driver. The platform provider companies are the following: Sony Computer Entertainment (PlayStation 4), Microsoft (Xbox One) and Nintendo (Switch and 3DS consoles). To illustrate how “network externalities” value driver works in the video game industry, we provide numbers of game titles and consoles sold for each platform in total (Nintendo eShop, n.d.; PlayStation Store, n.d.; VGChartz, n.d.; Xbox Live Marketplace, n.d.):

· PlayStation 4: 77,6 million consoles sold, 2580 game titles available;

· Xbox One: 37 million consoles sold, 1038 titles available;

· Switch: 16,1 million consoles sold, 644 game titles available

According to the dependency shown between the console install base and number of titles available for it, we can assume that value of a video game console increases with a number of released titles. At the same time, when more consumers obtain a particular console, it becomes more attractive for game publishers. Because of this fact, console producers are usually selling their hardware at a loss. For example, Sony Computer Entertainment senior vice president confirmed in 2013 that Sony is losing money on every PS4 console sold, though it has an opportunity to achieve further profits through game sales and paid subscriptions (Reisinger, 2013). Such practice is a necessary step to increase consoles install base and attract more publishers.

In contrast to the movie industry, where the final product is presented to the audience as a time-based activity that is exhibited in cinemas, games are distributed physically (on discs) or digitally (through online stores). Therefore, to avoid substantial risks of piracy losses, publishers usually implement the “property rights” isolating mechanism of competitive advantage through Digital Rights Management (DRM) techniques. Digital distribution segment continues to grow from year to year. In the United states it has already reached 74% of the whole video game market in 2016 (Brightman, 2017a). Though we are not provided with numbers from other markets, it should be expected that the global tendency is to switch from physical stores to digital product delivery. The role of digital distribution is rising and each of the platform providers develops his own service for online game distribution. For Sony Computer Entertainment it is PlayStation Store, for Microsoft - Xbox Live Marketplace, for Nintendo - Nintendo eShop. All the above-mentioned platforms provide access to purchase and download games through the Internet. In addition to their direct function of distributing software products, such stores are effective Digital Rights Management solutions. They offer unlimited copies of games played on unlimited machines, but only one user can play on a registered account at a time. Therefore, distributed products are impossible to pirate.

DRM practice even expands to products distributed physically on discs. In many cases, when players purchase a game from stores, they're not purchasing the full product. For example, Bethesda's game Fallout 4 had only 20% game content on the disc and required the rest of the content to be downloaded from the digital store platform (Alwani, 2015b). The same practice was implemented by Konami in their game Metal Gear Solid V: The Phantom Pain, which required additional 28 gigabytes to be downloaded from the internet (Alwani, 2015a). Such authentication practices gradually make distribution of game discs irrelevant.

The next value driver peculiar to the video game publishing is “risk assumption”. We already mentioned that quality of experience goods cannot be accurately measured without trying. But in the video game industry it implies significantly higher risks for consumers because of high prices offered for the games. For example, each newly introduced AAA-class game released by one of the major publishers for PlayStation 4 or Xbox One has a price about $60 in the United States or 4000 rubles in the Russian Federation. To avoid the purchase risks, publishers frequently offer free demo versions of their games that are distributed and downloaded online. To illustrate the scale of this practice we will note that PlayStation Store now offers 839 game demos on the US market and 205 of them in Russia (PlayStation Store, n.d.). Though the number of demo versions differs each month from country to country due to licensing rules and publishers' interests, the practice is still widely spread worldwide.

Exhibition / Retail

This stage includes business activities of selling goods to the public and comes out to have substantial differences between the two industries. In the movie industry these activities consist in providing ticket-based exhibition access to cinemas, while video games are often sold physically (through electronic chains, multimedia shops, specialist shops, ordinary distribution stores) or by means of online transactions.

It is worth mentioning that movie studios are underrepresented during the exhibition stage of the value chain because of historical circumstances. Previously mentioned “Paramount decrees” of 1948 drove studios out of the movie theater business. This occasion turned majors to focus on their contemporary business model of financing, production and distribution (Eliashberg et al., 2006) without any vertical integration into the exhibition segment. However, studios still apply certain isolating mechanisms to protect their products on this level. The widely used practice is to mediate long-term relationships with local theater chains and turn them into external “dedicated assets”. For this purpose, studios often establish exhibition relations department that deal directly with exhibitors on marketing of studios' movie releases. They perform such activities as sending the artwork (standees, banners or displays) and trailers of the film to appear at theaters in order to guarantee prerelease awareness and excitement (Olson Visual, 2013). Trailer content is selected carefully to feature compatible ratings and genres. For example, a cinema screen playing animation will show trailers for other animation movies, while prior to Oscar-awarded drama various critically acclaimed pictures will be advertised (Squire, 2004). Finally, the dialogue between exhibition relations department and cinemas includes frequent day-to-day communication to help exhibitors properly promote studio's product in theaters. Here are some examples of such departments in the structure of major studios according to their official websites:

- 20th Century Fox: Fox in-theater marketing department.

- Sony Pictures: Sony Pictures Exhibitor Relations Department.

- Parmount Pictures: In-theater marketing department.

In the video games industry, publishers' relations with retail actors are significantly more complicated. Companies like Sony, Microsoft and Nintendo are gradually disintermediating the traditional retail system with their digital online distribution practices. Such well-known physical retailers as Game Stop (presented in the United States, Canada, Australia, New Zealand and 10 European countries) or the United Kingdom distributor GAME saw their stocks plummet throughout 2017 to their lowest performance since 2012 and 2014 respectively (Brightman, 2017b). With the success of such consoles as PlayStation 4 or newly introduced Nintendo Switch, gaming hardware is still selling quite well in retail chains (Gilbert, 2017; Sweney, 2018), but it is not enough to sustain the retail actors. Some of them are switching to selling mobile phones or publishing their own titles. For example, Game Stop created its own publishing label called GameTrust two years ago (Rubin, 2016). Other retailers, such as 1C-Interes in the Russian Federation became more focused on merchandizing, books and souvenirs in their lineup, which can be transparently seen from the retailer's website.

The other way to influence the retail stage of video games is achieved through recommender systems that are available to consumers online. For example, PlayStation Network has a special section with curator recommendations where suggestions come from the most prominent developers in the industry. This addition to Sony's online store has a potential to influence consumption behavior with an insight into what customers' favorite game makers are playing themselves (IGN News, 2017). Another option that entirely removes the necessity to buy individual game products is cloud technology. One of successful examples is PlayStation Now streaming service which uses cloud-based technology to stream PlayStation 3 titles to your PlayStation 4, TV or PC. It functions in a similar way to Netflix or Spotify but for games rather than music or movies (Loveridge, 2016).

To summarize the above, “technology” value driver implemented by platform providers by means of creating their digital online stores (e.g. PlayStation Store, Xbox Live Marketplace, Nintendo eShop) allows them to undermine the retail segment of the value chain and bypass additional actors.

Consumption

Consumption stage is especially important for the process of value creation in entertainment industries such as movies and video games. As we already mentioned, according to the value constellation approach by Normann and Ramirez (1993), firms can reconfigure roles and relationships among different actors of the value chain. This process mobilizes customers to become active participants of the value chain and create additional value for themselves. People are no longer viewed as unilateral consumers of the final product, but as backwardly integrated prosumers strongly engaged in firms' business activities.

According to this notion, prosumers are the key players in creating positive or negative quality perception of the final product. Due to the rise of social media and popularity of internet information sources, quality of a game or movie is not limited by firm's investments in production and technology advancements of their products. One of the key drivers is how the game or movie will be met by opinion holders during or shortly after the consumption experience. This opinion holders share their quality perception with readers, followers and subscribers.

To measure the impact of prosumers on “quality” value driver we analyzed the dependency between critic ratings and games / movies performance. For this purpose, movies' and video games' average ratings were taken from internet-based aggregator Metacritic.com. This website contains ratings of various entertainment products presented as a percentage scale (grade from 1 to 100). Before being averaged, ratings from various media sources are weighted according to critic's popularity, status, and quantity of reviews.

For the analyzed movies (Appendix 1), correlation between their box office gross and Metacritic ratings was positive (0,32). Therefore, critic reviews can serve as some kind of predictor for films' quality. However, for some genres that do not appeal to critic audience, reviews influence does not work. For example, the romance movie “Fifty Shades Darker” which received strongly negative reviews (33/100 average score), became one of the strongest titles in Universal Pictures portfolio of 2017 with 381 million revenues and 593 % rate of return (Appendix 1).

Among the 100 top-selling video games of 2017 the influence of critic reviews can be considered significant. 83 out of 97 games received positive evaluations (75-100 rating), 14 games were qualified with moderate ratings (50-74 rating), 3 games didn't have rating statistics accessible. None of the examined top-selling games had negative cumulative evaluation by critics. Therefore, we can assume that critic reviews have certain influence on consumers' buying habits of video games.

However, there are certain ways how publishers can handle with the review influence. For example, Warner Bros. Interactive Entertainment required the online influencers they hired to make videos that advocated positive sentiment about their game “Shadow of Mordor” in 2016. These influencers had to promote their videos on Facebook and Twitter (Moon, 2016). Another way to undercut negative opinion is by limiting access to quality-related reviews until the product has been already released. For instance, Sony Pictures restricted access to reviews for “The Emoji Movie” until after the release weekend passed. It left all the internet media absent of any information about the movie's quality. Only after tickets for the weekend had been sold and families had made their weekend plans, access to quality-related information was restored (Barnes, 2017).

In addition to the quality driver, both industries have certain resource-based isolating mechanisms that increase “transition costs” during the consumption stage. For the movie industry, this mechanism is achieved through actors' star power. 20th century Fox former chairman Bill Mechanic told in one of his interviews about the movie “Cast Away” released in 2000: “To me, `A guy stranded on an island' without Tom Hanks is not a movie. With another actor, it would gross $40 million. With Tom Hanks it grossed $200 million. There's no way to replace that kind of star power.” (Bing, 2002). Participation of a top Hollywood star can command behavior of consumer audience and raise their switching cost when people choose which particular movie to attend.

To analyze this process on practice, we used information from Hollywood Stock Exchange (HSX) website, an internet-based market simulation where players sell their virtual “shares” of actors, directors, and movies. HSX serves as predictor of box office revenues with high accuracy, which is confirmed by such researchers as Elberse and Eliashberg (2003), Elberse (2007), Spann & Skiera (2003). For analyzing the star power, we took HSX current value of leading actors for each of the examined movies (Appendix 1) and correlated it with movies' revenues. Our calculations showed a positive relationship characterized by 0,54 correlation coefficient. Therefore, star participation supposedly influences the engagement of moviegoers and their desire to watch a particular movie. Normally star power is absent from the video game industry, but this situation tends to change. The upcoming Sony Computer Entertainment project “Death Stranding” will feature the Oscar winning director Guillermo del Toro, Cannes films festival best actor winner Mads Mikkelsen and “the Walking Dead” TV series leading actor Norman Reedus (Osborn, 2017).

“Transition costs” mechanism for video games is usually characterized by another business activity. It can be achieved through such concept as DLC (or downloadable content). DLC represents additional game content which enhances video game's features or prolongs its gaming experience. For instance, publisher Take Two Interactive reported that DLC accounted for 57% of company's revenue in 2017 with Grand Theft Auto Online game as the major source of it. Another big publisher, Activision Blizzard, made $3,6 billion on its DLC, such as optional content for games Call of Duty and Overwatch (Parfitt, 2017).

Additional feature granted to customers in order to increase their retention are season passes. A season pass is an offering provided for additional price, which grants access to all future content that will be added to the game upfront. This proposal is usually sold for a discount and includes all DLC that is not immediately available on game's release date (like new multiplayer maps or additional storyline). According to Anne Blondel, vice president of live operations at Ubisoft: “One reason why we sometimes announce the new content in advance is because we want players to know they'll have the choice to continue playing in the game world long after the game's release.” (Parfitt, 2017). By releasing a season pass publisher confirms that he will support the game throughout the year and by these means, increase its customer value. This is an efficient mechanism to lock in gamers and keep them playing. To illustrate the scale of DLC and season passes popularity, we can state that there are 96 of them currently available in the Russian version of PlayStation Store and 288 in the United States version for PlayStation 4 game console.

The concept of adding new content after the game had been initially released and purchased creates conditions that significantly differ from the movie industry. Modern games can be viewed from the perspective not so much of a final good but of a “service” - the driver that creates additional value to a customer. According to industry practitioner Ian Baverstock (founder of game publisher Chilled Mouse), the importance of user data and metrics, which companies obtain during games' consumption by online players, is very high. Studios often have specialized teams for monitoring and interpreting server data (e.g. game technical performance or players' feedback). This data is further used to improve gaming experience through regular content updates (Stuart & Webber, 2015). According to Digital River 2017 report, consumers are not usually comfortable to pay high price for a new game and therefore, choose titles with a constant flow of new content. Publishers strive to meet these requirements and adopt a model of a game as a service, releasing fewer titles throughout a year but keeping their consumers engaged with regular updates and add-ons (Taylor, 2017).

Support activities

As we already mentioned, Porter's (1985) model of the value chain implies that value creation can be associated not only with specific primary activities of the firm but also uphold the entire chain. This “support” type contributes to business activities of the company by various firmwide functions. Several drivers both for the movie and video game industries can be mentioned there.

“Vertical integration” driver is one of the key features that create competitive advantage of major movie studios / leading video game publishers in contrast to their smaller competitors.

Movie majors control production and distribution of their products entirely. During the production stage they establish their own subsidiaries, specialized in producing specific movie genres. As an example, we will enlist subsidiaries of the Walt Disney Studios and their specialization (The Walt Disney Studios, n.d.):

· Disneynature: Nature documentary films.

· Lucasfilm: Star Wars and Indiana Jones franchise movies.

· Marvel Studios: Movies based on Marvel comics characters.

· Disneytoon studios: Direct-to-video animation.

· Lucasfilm animations: Star Wars franchise animation films.

· Pixar: Computer animation film studio.

· Disney Live Action: magical storytelling live-action films.

· Walt Disney Animation Studios: Animated feature films.

In addition, movie majors have their own worldwide distribution subsidiaries for promotion and dissemination of their movies. Our data exemplifies the quantity of worldwide distributed movies by main distribution subsidiaries of major studios in 2017 (Appendix 1):

· Buena Vista International (Walt Disney Studios): 8

· Sony Pictures Releasing International: 15

· Paramount Pictures International: 11

· Twentieth Century Fox Film Corporation: 14

· Universal Pictures: 14

· Warner Bros. Pictures: 13

· Total: 75

In the above statistics we did not take in account four Sony Pictures movies that were released specifically for the Spanish market and distributed only there. It should also be mentioned that majors usually have additional distribution subsidiaries specialized in independent films by third-party producers (such as Fox Searchlight Pictures and Sony Classics) that we did not include in our analysis.

Like the movie studios, video games leading publishers are also vertically integrated into production and distribution. For instance, the majority of most successful Nintendo Switch console games were developed by Nintendo's own department called Nintendo Entertainment Planning & Development. Such titles as Super Mario Odyssey (¹ 3 best-selling game of 2017), Mario Kart 8 Deluxe (¹ 4 in the list), The Legend of Zelda: Breadth of the Wild (¹ 5), Splatoon 2 (¹ 10), 1-2 Switch (¹ 33), Arms (¹ 36) were developed by Nintendo itself. Other successful games were developed by Nintendo-owned subsidiaries, such as the Pokemon Company specialized in Pokemon franchise games, including Pokemon: Ultra Sun and Ultra Moon (¹ 8 in the top-selling list), Pokemon Sun/Moon (¹ 17), Pokken Tournament (¹ 56). Nintendo's portfolio of development studios also includes Mololith Soft developer, specialized in creation of role playing games, e.g. Xenoblade Chonicles 2 (¹ 76 best-selling game of 2017). All the above-mentioned games are published and distributed by Nintendo itself (VGChartz, n.d.).

Industry leaders in both movies and video games implement the “geography” value driver by establishing their publishing and distribution subsidiaries worldwide. We already mentioned some examples from the movie industry, where majors create their local distribution subsidiaries to promote and distribute their movies on foreign markets. Examples for the Russian market are Walt Disney Studios Sony Pictures Releasing (WDSSPR), 20th Century Fox CIS and Universal Pictures Russia (Booker's Bulletin, n.d.). We already mentioned them in previous paragraphs. The same practice is implemented by companies in the video game industry. In the continuation of our example for Nintendo company, we can enlist their publishing and distribution subsidiaries worldwide according to www.nintendo.com official website:

- Nintendo of America (based in Redmond, Washington).

- Nintendo of Europe (Grossostheim, Germany).

- Nintendo Australia (Melbourne, Australia), specialized in publishing, distribution, sales and marketing in Australia, New Zealand and Oceania.

- iQue (Suzhou, China), a joint venture for operations on the Chinese market.

- Nintendo of Korea (Seoul, South Korea).

Additional geographic factor involves production and distribution activities for specific geographical markets. For example, in the movie industry, 17% of worldwide box office revenue was received from the Chinese market during 2016 (MPAA, 2016). Co-production with local partners or distribution of movies produced by local studios can be extremely profitable if the final product meets the requirements of indigenous audience. This practice can be exemplified by “The Great Wall” movie (2017). The picture was produced and distributed by Universal Studios but filmed in China with local director and cast. Movie's appeal to Chinese audience allowed it to attract large quantities of moviegoers and achieve impressive results on this market with 171 million U.S. dollars or 60 % of its total box office revenues worldwide (Box Office Mojo, n.d.). In video games industry this strategy is implemented for some of the Japanese-developed products like Sega's “Yakuza” game series, Capcom's “Monster Hunter” series or Square Enix “Dragon Quest”. Each new title of the franchise is first tested on the Japanese market and only after a year of sales scheduled for distribution worldwide (VGChartz, n.d.). To summarize the above, broad geographic scope and variety of locations create better accessibility for companies' products and provide additional value to potential customers.

Leading companies have additional opportunities to spin more revenues through “complements” value driver by providing access to ancillary products for their games and movies. Merchandising of t-shirts, figures, hats, mugs, etc. is a popular strategy around leading industry players. Microsoft's Halo game series on Xbox console is supplemented by such content as novels, comic books and Steven Spielberg's television series (Mithaiwala, 2018). This approach tends to become a norm for all successful franchises to follow. There is also a rise of “toys to life” genre - mini figures that allow to put them on a special sensor pad and add characters to the onscreen action. Nintendo's Amiibo, Disney's Infinity and Activision's Skylanders are the major players on this market (Stuart & Webber, 2015).

For the movie industry, the primary source of complement product continues to be DVD-disc sales. For instance, in the United States it brought $6,1 billion revenues in 2015 plus additional $3 billion revenues for disk rentals (Wallenstein, 2016). However, the market share of disk sales continues to decline with the rise of video-on-demand rivals such as Netflix and Amazon. In 2017 streaming and downloads have already outperformed DVD sales in the United Kingdom (Sweney, 2017).

Additional advantage in exploiting complements can be achieved through cross-industry merchandising of video games and movies for the same shared franchise. Such strategy is often implemented by companies that have their own video games and movie industry subsidiaries simultaneously, like Warner Brothers (Warner Bros. Pictures / Warner Bros. Interactive Entertainment) that produces movies and games on “Batman”, “DC Comics” and “Mad Max” franchises; or Sony (Sony Pictures / Sony Computer Entertainment) which exploits their Spider Man franchise both in movies and the upcoming Spider Man 2018 game (Phipps, 2018).

Furthermore, creation of thematical amusement parks can be an additional source for distribution of various merchandize goods. This widely popular practice among the movie majors (e.g. Disneyland, Universal theme park) is gradually penetrating the video game industry. In the run-up to 2020 summer Olympics, Nintendo is creating its own theme park in Osaka in collaboration with Universal Studios Japan (Peckham, 2017).

In addition to the foregoing factors, “organizational practices” value driver can be mentioned as a unique feature of video game industry console manufacturers like Sony, Microsoft and Nintendo. It includes digital distribution activities through PlayStation Store, Xbox Live Marketplace and Nintendo eShop that gradually disintermediate the traditional retail segment of the value chain. The practice was extensively analyzed in “publishing and distribution” and “exhibition / retail” paragraphs of this chapter. The other specific video game feature is the pre-order of forthcoming titles. According to SuperData industry analysis, pre-orders are often sold during final stages of development and allow publishers to make a considered decision either to curtail or to spur the most expensive part of the development process proportionally to the product's demand. Pre-orders also influence the process of decision making related to physical distribution of game discs. Knowing product's demand in advance can reduce the number of unsold copies that are sent back during the retail stage (Parfitt, 2017). Summarizing the above, we can state that leading video game industry players developed a range of organizational practices that influence several stages of the value chain simultaneously.

3 Results and applicability

3.1 Research findings

The main goal of this thesis has been to analyze and compare competitive strategies on different stages of the value chain between global movie and video game industries. For this purpose, we used the concept of strategic drivers - structural causes of the firm's cost, value and focus activities that improve its performance and define competitive strategy. All the drivers were divided into three categories:

- Value oriented drivers based on “uniqueness” business activities;

- Cost oriented drivers based on “low cost” business activities;

- Isolating mechanisms that protect firm's resources and capabilities.

The analytical part of the current thesis proved the fact that major movie studios and video game industry leading publishers implement the whole spectrum of competitive drivers in their strategies along different stages of the value chain. Therefore, the presentation of findings in this Chapter is submitted in the form of value chain stages including: production / development, publishing and distribution, exhibition / retail and consumption. In addition, several drivers were highlighted as responsible for upholding the entire value chain. They were separated from firms' primary activities and allocated to the support type functions.

Production / development drivers

Global movie and video game industries competitive strategies on production / development level of the value chain have certain significant similarities. We can state that creation of games and movies includes such value-added competitive drivers as “technology”, “quality” and “breadth of line”. Companies in both industries invest heavily in ultimate technology and product excellence to create maximum uniqueness for their goods. At the same time, they tend to form a diversified portfolio of numerous genres and franchises in order to satisfy the widest range of preferences of various groups of gamers / moviegoers. High investments during the production / development stage contribute to the “sunk costs” isolating mechanism and create substantial barriers of entry for smaller rivals.

Publishing and distribution drivers

Based on the examined processes, global movie and video game industries' competitive drivers during this stage have certain parallels. “Brand/reputation” driver is crucial both for game and movie publishers. Their marketing activities are strongly franchise-driven, and customers are more comfortable to purchase products based on well-known intellectual properties. Focusing on “delivery” value driver is also critical. Companies from both industries strive to choose a favorable release window due to rivalry between titles and impact of word-of-mouth effect that influences consumers' buying habits. Finally, the “dedicated asset” isolating mechanism is implemented in both industries. Publishers of games and movies arrange partnerships with distribution companies on local markets to dispense their products globally.

Meanwhile, video game companies have several unique drivers, missing from the classical entertainment industry, such as movies. First, video game console manufacturers like Sony, Microsoft and Nintendo can obtain control over the distribution segment through “network externalities” value driver. By creating the high install base on early stages of a console lifecycle, they secure the long-term success and attract more consumers and developers. Second, game publishers have opportunities to command the “risk assumption” value driver by releasing freely downloadable demo-versions of their products. Third, industry practitioners tend to use Digital Rights Management techniques to defend their positions through “property rights” driver.

Exhibition / Retail drivers

Major movie studios and leading game publishers are not widely present on the stage of selling goods to customers, though they still retain an enduring influence on this level. Movie majors are striving to turn exhibitor cinema chains into their long-term partners through implementation of “dedicated asset” isolating mechanism. For this purpose, studios often have their own exhibition relations departments that deal directly with exhibitors on marketing of studios' movie releases. The influence of game console platform providers on retail segment is even more drastic. By adopting “technology” value driver and raising consumers' willingness to buy video game products online, they completely bypass the traditional retail stage actors and increase their own margins.

Consumption drivers

Both industries have certain instruments to influence buyers' behavior during the consumption stage of the value chain. First, video game publishers and movie studios are trying to use the “quality” driver and gain additional value by influencing the reviews on their products. Second, they defend their positions through “transition costs” isolating mechanism that prevents customers from switching to substitute products. In the movie industry that is done by star power of actors. In the video game industry - by constant flow of downloadable content that extends the gaming experience. Moreover, video game publishers have an additional “service” value driver. By continuously improving gaming experience and taking in account customers' feedback they create unceasing service relationship with their clients.

Firmwide drivers

Video game and movie industry leaders have a range of specific firmwide factors that contribute to sustaining their competitive advantage. The “vertical integration” driver, that involves major movie and video game industry publishers in financing, production and distribution of their products, reduces their operational costs and allows to handle business activities on a wide scale. The “geography” driver, presented in the form of various publishing and distribution subsidiaries on the local markets, contributes to promotion and accessibility of games and movies worldwide. Finally, the “complements” driver enhances consumer experience by cross-industries merchandizing (e.g. game-movie collaboration based on a shared franchise; production of game/movie inspired toys, etc.). In addition, certain unique video game industry “organizational practices” are also worth mentioning. For instance, the rise of digital distribution allows publishers to skip the physical retail stage and therefore, increase their margins. Furthermore, pre-order practices give an opportunity to raise additional funds for the most expensive parts of development process and make predictions on a necessary number of physical copies for video game retailers.

According to the conducted analysis, we enlisted and identified competitive drivers and isolating mechanisms of global movie and video game industries as displayed in Tables 6 and 7. The tables show that strategic decisions in both movie and video game industries can be multiple and diverse. On the one hand, various value drivers and isolating mechanisms create conditions for exploiting differentiation competitive strategy and defending the resources necessary for it. On the other hand, cost driver of vertical integration creates opportunity for implementing cost-oriented competitive strategies by performing business activities more effectively through the entire industry value chain. Lastly, focus strategies can also be rich and diverse. As we can see through the obtained data, focus strategies are presented by creating a diversified portfolio of different games and movies for a wide range of consumers. The other example of a focus strategy is achieved through production and distribution of specific products for wide range of geographical markets.

To summarize the above, simultaneous emphasis on several generic strategy types (differentiation, cost and focus) supports the idea of dimensional approach on competitive strategy in global movie and video game industries. These hybrid (or mixed) strategies have several advantages. Mixed strategies are more malleable as they secure several resources of advantage. They faster adapt to customers' needs and changing circumstances on the market and thus become more balanced. They allow major movie studios and video game leading publishers to improve their standings in several dimensions at once and perform business activities that are harder to imitate by their rivals.

Table 6. Competitive Drivers and Isolating Mechanisms in the Global Movie Industry Value Chain

Table 7. Competitive Drivers and Isolating Mechanisms in the Global Video Game Industry Value Chain

3.2 Limitations and further research on the topic

The current master's thesis is based on a narrow sample of cases. In our research we focused our attention on business activities of the leading global publishers in both industries and analyzed the performance of their games and movies during one year. It reduced our ability to understand the coherent picture of competitive strategies in the global movie and video game industries. To complement and verify the obtained results, it may be instructive to perform a quantitative research with a broad sample of firms and their products. Further investigation will help to validate the factors enlisted in this work and compose a statistically significant model. Moreover, a substantial part of information used in the analysis was based on articles from various mass media sources. Additional interviews in person with business practitioners can discover unknown facts and provide foundation for the current research.

In addition, there may exist more factors that have their effect on competitive strategies in global movie and video game industries but are not presented in current paper. Continuous analysis of industry players' business activities can provide unknown information about them. Moreover, our research was focused on performance of games and movies on a global scale. It would be interesting to learn more about specificities of competitive strategies in particular regions, especially on the emerging markets.

Finally, we should notice that video game industry has several drivers of competitive strategy that are still not presented in the movie industry. Due to the two-sided characteristic of the video games market, high install base of gaming consoles influences their attractiveness for consumers and publishers. The rise of high quality home video hardware and ascending popularity of video on demand can create a similar condition for the movie industry. The exhibition market may possibly cede its leadership to home screens where rivalry will continue between the movie streaming platforms. In this case, the two-sided platform experience of the video game industry will become highly applicable to the major movie studios as a source of future strategic decisions.

As a follow-up to the subject of Internet influence on global movie and video game industries' competitive strategies, the discussion should be raised related to impact of online players on traditional value chain. In the movie industry, popularity of video on demand services (such as Netflix, Amazon, YouTube and Hulu) results in decline of cinema attendance, while modern customers develop a habit to watch what they want as many times as they want on their electronic devices. This tendency disrupts traditional model of the value chain, transforming it into more complex value constellation with a variety of new players. In order to defense their positions, some of the major companies start to offer video on demand abilities to their customers. For instance, Disney is going to draw all content from Netflix and launch its own streaming platform in 2019 (Doyle, 2018). Similar issues are happening in the video game industry. Traditional players that are focused on publishing their products for home consoles lose their positions to rapidly growing mobile segment. Chinese companies like Tencent and NetEase have already established themselves as industry leaders through publishing online games for mobile phones and tablets. Tencent's mobile title “Honor of Kings” has already become the most lucrative title last year (Hancock, 2018). To summarize the above, it should be crucial to examine business activities for both industries beyond the traditional value chain. While linear value chain model mostly focuses on cinema and home console titles, new internet-based players gradually disrupt this traditional model with their video-on-demand / mobile products and tend to become strong contenders for industry leadership. The analysis of competitive strategies for these new players and their influence on both industries' value chains might usefully be reserved for separate study.

Conclusion

The present paper has been focused on analyzing and comparing competitive strategies relevant to the global movie and video game industries. In order to attain this goal, performance of movies and video games produced and distributed by leading companies in both industries has been researched and drivers that influence competitive strategies have been defined according to the existing literature. These competitive drivers were divided into three major groups: value-oriented drivers, cost-oriented drivers and recourse-based isolating mechanisms.

The theoretical basis enabled us to specify competitive drivers applied in movie and video game industries by providing them with examples that we analyzed in the second part of the research. The case study method was chosen to explore performance of leading worldwide publishers in both industries on basis of movies and video games distributed in 2017. The conducted analysis helped us to delineate the comparison of competitive strategies between the industries.

The outcomes of this comparison guided us towards the major drivers that determine competitive strategies of the leading movie and game industry publishers on the global market. Common factors include: value-oriented drivers (technology, quality, delivery, breadth of line, brand/reputation, geography, complements), cost-oriented drivers (vertical integration), resource-based isolating mechanisms (sunk costs, property rights). However, several drivers can be considered unique. Due to the digital nature of video games, the traditional retail segment in the industry is gradually disintermediated by technological advancements like accessibility of high-speed Internet and increasing popularity of digital online stores. The other key factor that influences competitive strategies for video games is two-sided characteristic of the market and network effect that forces publishers to seek high installment base for their products. Finally, modern games are often viewed from the perspective not of a final good unilaterally sold to a consumer but of a service that is gradually improved and complemented by various patches, downloadable content, and updates. Competitive drivers considered unique for the movie industry include such instruments as star power of actors that is used to increase reputation of a particular movie; the other unique feature is the practice to attract exhibitor partners by establishing long-term relationships with local theater chains.

Simultaneous emphasis on several generic strategy types (differentiation, cost, and focus) led us to a conclusion of hybrid strategy implementation by the key players in global movie and video game industries. Companies in both industries improve their standings in several dimensions at once and, therefore, are harder to imitate by their rivals.

Inevitably, every work has its limitations. In our case, the research was limited by focus on leading global publishers in both industries and performance of their games and movies during one particular year. However, this can be an incentive for further research on the topic, which is especially important for such undiscovered phenomenon as video game industry and its comparison with other spheres of entertainment. Another relevant issue for further studies is the process of cross-industry value creation. Such industry leaders as Sony (Sony Pictures Entertainment / Sony Computer Entertainment) and Warner Bros. (Warner Bros. Pictures / Warner Bros. Interactive Entertainment) are presented in both movie and video game businesses simultaneously. Further study could provide important insights on how value is created across individual industries through horizontal expansion of the value chain. In addition, future research can be expanded by the analysis of internet-based new players in both industries. Such value chain actors as video on demand providers or leading mobile game publishers gradually transform the traditional value creation process and, therefore, should be worth a separate research topic.

To summarize the above, the goal of the present thesis has been fully reached and testifies that competitive strategies have significant impact on the performance of key players in both global movie and video game industries.

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