The video game industry, providing a unique opportunity to study the theory and practice of
international business, forms the basis of this paper. We examine the industry rst in terms of a
micro analysis which reveals that the market dynamics of the industry revolve around networkexternalities and the strategic choices made at the inception of the industry, namely that of non-interoperability. This phase of the paper, by virtue of a historical analysis, also points to theskills dimension of the industry and how such plays a pivotal role in its success.The second level of analysis seeks to provide contextual value to our examination of the in-dustry and therefore focuses on the forces within the environment. These forces, taken in thecontext of globalization, indicate that the video games industry is in the midst of a globaleconomy. This being said the analysis proceeds to examine the ways in which globalization
manifests itself through a study of cultural, political, legal and economic environments, nding
that while globalization is evident within the video games industry, distance continues to playa substantial role.
The nal phase of our research centred on the strategic implications of our analysis. We iden
tied three main strategic issues which face the video games industry, namely managing dif
-ference, managing talent and managing network externalities. We then devised the strategies
which might address these issues, adopting a multidisciplinary or congurational approach in
The remainder of our paper centred on the ndings of our research and the implications for
international business and other sectors. From an international business perspective we foundthat history provides a valuable dimension to the discourse and that globalization can coexistwith localized forces thus rendering both the global and local arenas important platforms forinternational business. We also devised a processual model of analysis which uses the industryand its environment as a lens which shapes global forces, the product being the key strategicissues faced by the industry at hand. Finally we asserted that the video game industry providesmany lessons for all international sectors but particularly those which also operate within a
similarly turbulent environment such as fashion, music and lm.