One Up: Creativity, Competition, and the Global Business of Video Games

by Joost van Dreunen

What explains the massive worldwide success of video games such as Fortnite , Minecraft , and Pokémon Go ? Game companies and their popularity are poorly understood and often ignored from the standpoint of traditional business strategy. Yet this industry generates billions in revenue by thinking creatively about digital distribution, free-to-play content, and phenomena like e-sports and live streaming. What lessons can we draw from its major successes and failures about the future of entertainment?

One Up offers a pioneering empirical analysis of innovation and strategy in the video game industry to explain how it has evolved from a fringe activity to become a mainstream form of entertainment. Joost van Dreunen, a widely recognized industry expert with over twenty years of experience, analyzes how game makers, publishers, and platform holders have tackled strategic challenges to make the video game industry what it is today. Using more than three decades of rigorously compiled industry data, he demonstrates that video game companies flourish when they bring the same level of creativity to business strategy that they bring to game design. Filled with case studies of companies such as Activision Blizzard, Apple, Electronic Arts, Epic Games, Microsoft, Nexon, Sony, Take-Two Interactive, Tencent, and Valve, this book forces us to rethink common misconceptions around the emergence of digital and mobile gaming. One Up is required reading for investors, creatives, managers, and anyone looking to learn about the major drivers of change and growth in contemporary entertainment.

Genres: Nonfiction, Business, Gaming, Video Games, Games, Game Design, Economics

296 pages, Hardcover

Published October 6, 2020

Reviews

[Anu · Rating 4 out of 5]

Super fascinating breakdown of the history of video games, with a contextual narrative of all the inflection points in tech, platform and business models. Crazy to see how bundling/unbundling cycles have played out across multiple layers in the supply chain network, creating unlikely winners and overnight losers in a rapidly moving industry. Serves all tech people well given how much gaming has influenced the business and consumer tech space at large.
Buy the hard copy, the tables of numbers in the kindle version is painful to read.

[Matt Conger · Rating 5 out of 5]

This book achieved something incredible. It changed my mind in terms of being a snob about video games. I was compelled to read this because I was so disappointed in a previous book that purportedly covered the same ground ("the business of video games"): Disrupting the Game: From the Bronx to the Top of Nintendo.

The author has two goals with this book: first, describe the history of innovation in the business of video games. Second, knock people like me down a peg or two for being video game purists.

And he succeeded. He very thoughtfully explains that things like (gulp) Kim Kardashian-branded mobile games or (double gulp) lootbox/season pass mechanics are actually good for the industry.

His arguments are pretty simple. The costs of making video games has increased substantially. High-end titles cost 15x more to make now than they did a few console generations ago. And seemingly cheap-to-make games like Candy Crush end up being expensive to bring to market because of user acquisition costs.

And yet, buying a new video game has pretty much been $60 USD for as long as I can remember (he has a chart showing how average prices have evolved over time). So it is no wonder that the industry has relied on new business models and adding mainstream users to stay afloat.

I like that this book makes me think about current video game controversies with more perspective. Two things in particular were quite eye-opening: the geographic fragmentation of the industry and the role of IP development.

Here’s how this book made me rethink the current controversy over the monetization strategy of Diablo Immortal (don’t come at me r/gaming).
- Western countries will predominately prefer games-as-a-product (i.e., pay $60 for a full game) and they are relatively saturated in terms of growth. By contrast, still-growing Asian ones will mostly prefer games-as-a-service (i.e., free-to-play with microtransactions).
- The market grows fastest both in terms of $ amount and in terms of innovation when IP doesn’t just stay with one developer and one published. By licensing their IP to developers and/or creating a competition around it, it creates more “at-bats”, even if some of those development efforts are huge failures.

In these market conditions, I can see why Blizzard took a deep breath and opted to partner with NetEase and bring the Diablo IP to mobile. This is just one example of how this book stretched my thinking on the video game industry.

This book deserves 5 stars, with my only (unfair) criticism being its publication date. It came out in October 2020, so the book only makes cursory references to the pandemic and its effect on gaming. That publication date means there’s nothing on Gamestop as a meme stock, nothing on From Software’s jump to the gaming mainstream with Elden Ring, and as mentioned, nothing on Diablo Immortal.

Rest assured that the author has continued to give free, weekly commentary on the video game industry (which he awkwardly calls ‘the interactive entertainment industry’) through Substack.

For fellow gamers reading this, I strongly encourage you to read this and consider escaping the traditional gamer mindset.

[Jules · Rating 4 out of 5]

If there was a "Intro to the Business of Video Games 101" class, this would definitely be an assigned reading. Provides good context on the history, the present, and possible next moves for the industry-- focuses more on monetization models, different platforms, the changing markets, and things like that vs. the game dev / creative side (which I feel like makes up the majority of what's out there)

Definitely some sections I'll need to go back and read, but great overview on exactly the topics I was looking for.

[Nick · Rating 4 out of 5]

A bit dry but the book provides a comprehensive analysis on the industry’s evolution over the past few decades. A great business 101 book on gaming.

[Jack Reid · Rating 4 out of 5]

Summary and analysis of the business of video games by an esteemed analyst and professor of the medium. Fascinating to read after finishing a few memoir / journalistic perspectives. Highly recommend for background and insight into the hit / miss business of video game development and publishing.

[Patrick Pilz · Rating 4 out of 5]

One-up is a pretty solid overview how the business of computer games evolved. This is not the history of computer games, lacks in places some of the stories about the coin operated computer game business and focusses mostly about the groundbreaking changes which has lead computer gaming which displaced a lot of the other entertainment options we used to use. The blockbuster business of the big gaming franchises rival and surpass major movie franchises like Marvel or Star Wars. The dynamics are dynamic, and the information is compiled based on a lot of original research, and well presented.

I would recommend the book in the category "business" for non-fiction readers, or for investors in the market places. The mechanics of financing and amortizing computer game development is at the center of the book and truly illuminating.

[José Antonio Lopez · Rating 4 out of 5]

This book is a must read for people wanting to excel in the gaming industry. Lots of creatives and developers are so immerse in their passion that they forget this is just a business. Van Dreunen makes a very detail case on the in and out of how the gaming industry works, how it has evolved, how some strategies became successful while others tank. Something remarkable about Van Dreunen work is that the lack of information about this industry didn't stop him, instead he develop his own charts and tables to explain the evolution of the industry.

If you want to live from gaming, One Up should be on your short list of readings.

[Clark Stacey · Rating 5 out of 5]

The best book I've personally encountered on the history of the games industry value chain and the market forces that shaped game monetization up to 2020. And that's the book's only weakness, really; there has been enormous upheaval in the industry and new tidal forces have been reshaping business models since the pandemic. One Up provides a tremendously valuable overview of where we've been, but so much has happened in the past four years, it can hardly be expected to render a navigable map of where we are.

Still, for students of the industry or game enthusiasts wondering how we got from boxed software at retail stores to loot boxes and incentivized ads, this is a masterful overview.

I look forward to the next edition of this book with great anticipation.

[Tab Williams · Rating 4 out of 5]

A wonderful primer on the video game industry - where is has come from, where it is today, and potentially where it is going. It was a bit lighter on discussing actual companies and their strategy, which was a huge disappointment. Also, many of the topics were long-winded and at times the bull was slow. That said, it was a very good primer for the industry and I have a better handle on the drivers, what matters, and some of the risks. Overall, a must read with anyone that messing around in the industry.

Note - doesn't touch much on the platforms like roblox, fortnight, minecraft, etc.

[Dylan Flaks · Rating 4 out of 5]

This book and the Gamecraft podcast are great companion pieces. I just wish I had read it contemporarily. The flip side is the book’s author maintains a substack where you can still get his insights in the industry WoW.

A recommend for anyone wishing to better understand the way economics and business models have shaped innovation and changes in the video games industry. It’s digestible for everyone and its graphics and tables help deliver strong and poignant messages.

[Daniel Ottenwalder · Rating 5 out of 5]

As someone in the games industry this book felt like a missing link tying business cases to creative endeavors. As most books in the industry center around design and the creative process. It felt almost like a mini The Prize by Daniel Yergin in describing the evolution of the industry and where it can possibly go in the future.

[Alex · Rating 4 out of 5]

The book covers quite a lot of stuff and I liked the fact it included graphs and data. But a lot of stuff was covered in quite a shallow way and there were only a few novel insights.

It’s nice to see a book that focuses on the economics though. I just wish the book would have been longer and covered the topics in greater detail.

[Liying · Rating 2 out of 5]

The book read like an academic journal article, but just one that was really descriptive and left more questions than answers in my head (about the case studies the author described). He covered quite a range of notable game companies in the industry though, so it gives a broad understanding of some of their business models and other proceedings at least.

[Matt Berry · Rating 5 out of 5]

The best primer I've come across, on the gaming industry.

[Bob Makin · Rating 5 out of 5]

Great book, only deep dive into the ever evolving games industry book I know of.

[Özgür · Rating 5 out of 5]

Excellent book to understand business models, industry dynamics and the history...

[Shannon Liao · Rating 5 out of 5]

Great read, highlighting the business of games.

[Christian Zommerfelds · Rating 5 out of 5]

Pretty nice overview of industry dynamics at a high level. I was hoping to get more advice for small companies, but still there is good information in this book!

[David Liu · Rating 5 out of 5]

Really good book, more fact-based then narrative driven but still very engaging, obviously biased because I’m interested in the subject matter. Very data-driven and comprehensive as well