Profiting from Innovation in the Digital Era: Evidence from the Swedish Videogames Industry

We know that firms use multiple appropriability means: intellectual property rights (IPRs), trade secrecy, market lead-time, and this varies significantly between industry sectors. We, however, do not know how and to what extent the appropriability regime are modified in response to digitalization and open innovation. This study aims to fill in that gap, through a study of the Swedish games industry. Applying a well-established framework — Profiting from Innovation — to the digital context, this study collects primary data from semi-structured (firm) interviews, a survey and combining the statistical data from the branch organization and from EUIPO trademark database. It has been identified that: (a) this is an industry re-entering into a fluid phase of innovation with a rapid growth of products and (small) firms; (b) the value chains are transforming into value networks and the complementary assets are to be reassessed; and (c) trademarks are gaining importance and a Demsetz-ian path of internalization of IPs is pursued. Digitalization re-defines the key pillars of the PFI framework in many respects.