Key Value Drivers of Startup Companies in the New Media Industry-The Case of Online Games in Korea

The amazing speed of innovations in the new media industry is now forcing major studios and publishers to search for promising startup companies to sustain their competitive edge. However, selection and valuation of startup companies, especially in the new media industry, is difficult to conduct bec...

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Bibliographic Details
Published inJournal of media economics Vol. 25; no. 4; pp. 244 - 260
Main Authors Yoo, Changsok, Yang, Dongwoo, Kim, Huykang, Heo, Eunnyeong
Format Journal Article
LanguageEnglish
Published Philadelphia Taylor & Francis Group 01.10.2012
Routledge, Taylor & Francis Group
Subjects
Competitive advantage
Computer & video games
Fair value
Innovations
Startups
Studies
South Korea
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Summary:The amazing speed of innovations in the new media industry is now forcing major studios and publishers to search for promising startup companies to sustain their competitive edge. However, selection and valuation of startup companies, especially in the new media industry, is difficult to conduct because of the high amount of uncertainty. To understand and find the fair value of startup companies in the new media industry, we needed to investigate the key value drivers. In this study, we focused on the characteristics of uncertainty and the resource-based view of the firm and empirically analyzed the market value of startup companies based on the case of the online games industry in Korea. Results showed that the product development stage, market size, the ease of lock-in, technological competency, and a key talent are the five major key value drivers of startup companies in the Korean online games industry.
ISSN:0899-7764
1532-7736
DOI:10.1080/08997764.2012.729546