Brand equity in the video game industry

This research investigated the role of branding in the video game industry and how perceived brand differentiation influenced brand loyalty among members of Generation Y in the Netherlands. It aims to fill a gap in branding literature investigating the importance of brands in the video game industry. The video game industry is characterized by an oligopolistic structure with Nintendo, Sony and Microsoft remaining as the three main video game console manufacturers in the contemporary market. The present study investigated to what extent the target demographic perceives the three brands as differentiated and to what extent this influences their loyalty towards these brands. A quantitative method was used employing a questionnaire in order to assess participants’ opinions about the brands. Statistical analysis allowed for investigating the linear relationship between perceived brand differentiation and brand loyalty. Results show that there is a relationship between the two concepts, meaning that when a participant scores higher on the differentiation scale indicating more differentiation of the brand, it is likely that participants score higher on the loyalty scale. Multiple regression analyses indicated that the strength of the perceived brand differentiation score could account for nearly 50 percent of the score of brand loyalty for all three brands, indicating a high degree of relatedness between the two concepts. The results also stress that there is a certain causality among brand sources that compose brand equity, implying that marketers can focus their attention on multiple steps in gradually building brand equity. For firms operating in the video game industry, it turns out to be viable to focus on differentiating a brand from the competition in terms of software offered on the console and offering advantages that competing brands do not offer. This is likely to increase brand loyalty among Generation Y consumers in the Netherlands.