Peer Influence in the Adoption of Video Games

Introduction

Video gaming has been a large, steadily growing industry over the past few years. During the recent COVID-19 pandemic, people spent more time at home to prevent the spread of the virus. Accordingly, consumers are more likely to rely on video games to manage their mental health (Kim 2021), drastically increasing video game sales (Entertainment Software Association 2020). Unlike traditional brick-and-mortar stores, online video gaming platforms allow interactions between consumers. Specifically, an online game platform can be considered as a community of friends with shared interests. Users can view their friends’ purchased games, gameplay statistics, and game screenshots. They can also send or receive messages and get personalized notifications about their friends’ games when they are playing. These interactions make social influence more salient in online video gaming consumers’ decision-making process.

This article aims to quantify the role of peer influence in the adoption of video games. Although the effect of social influence has been widely discussed, the identification of peer influence remains challenging for empirical studies using observational data (Manski, 1993; Bapna and Umyarov, 2015). The main difficulty is that product adoption can also be explained by homophily, in which dyadic similarities between users create correlated outcome patterns among friends. However, such patterns merely mimic viral contagions without direct causal influence (McPherson et al., 2001). Therefore, when a user purchases a new game, it is important to know whether peer influence or internal similarity between the user and their friends drives game adoption. The present study attempts to answer the following research questions: (1) Does peer influence exist in the purchase behavior of online video games? (2) Can researchers disentangle homophily from peer influence?

This study captures the similarity of users through consumer tastes, which are modeled as latent features based on past purchases and the recorded game genres. Game genres present a rich collection of information describing gameplay, such as action, strategy, or casual, and are closely associated with consumers’ personality and psychological characteristics (Von Der Heiden et al. 2019; Potard et al. 2020). Accordingly, we utilize a model where the internal aspects of consumers will be incorporated into the ’genre-based’ user similarity measures while we will reflect the external aspects through peer influence and other observable user features. The approach is similar to that taken in Sheu, Chu, and Wang (2017), where the consumers’ internal personal cognition was evaluated through sensory, feel, think, act, and relate experiences in the games. If peer influence can be identified in the adoption of games, game publishers can generate more revenue by targeting influential users or building product features that facilitate peer interactions. Alternatively, if homophily dominates consumer purchase behavior similarity, game publishers should focus more on analyzing the shared taste of users who purchased similar games.

This study bridges two streams of research on the video game industry and product adoption. On one hand, there is scant empirical research investigating the video game industry. Additionally, it focuses more on various factors affecting game sales (Zhu and Zhang, 2010; Cox, 2014). On the other hand, previous literature has examined the effect of peer influence on product adoption in domains like technology adoption (Brown and Venkatesh, 2005), service adoption (Bapna and Umyarov, 2015), and application adoption (Aral and Walker, 2011; Davin et al., 2014). However, none of these explored the effect of social influence on video game platforms. To the best of our knowledge, this is the first study to investigate the impact of social influence on video game platforms.