This is the first book that comprehensively describes the history of the game software industry in Japan. A major objective here is to identify the key determinants of the emergence of the business, the maturing of the market, and the changes brought about by innovations, based on the history of the Japanese industry. To date, similar books have focused only on particular topics of the game software industry, such as the success of Nintendo and Sony and the uniqueness of the Japanese industry. There are no books that interpret the development process of this industry from the point of view of innovation. To fully understand the business and derive insightful lessons from it, however, requires a careful and thorough examination of its development process. Currently, many companies aim to improve efficiency by using information and communications technology (ICT), but it is difficult to maintain a balance between the pursuit of efficiency and the encouragement of creativity. In the case of Japan’s game software industry, firms have pursued higher efficiency in product development to build competitive advantage, resulting in a low rate of radical innovation and causing the slow growth of the industry.  In certain situations, the development activities that target the creation of new products may, in themselves, hinder the creation of truly new products. This book conceptualizes this phenomenon as a “development productivity dilemma� and clarifies the mechanisms behind it.  The dilemma, like the productivity dilemma in the manufacturing industry, evokes a certain innovation pattern and prevents potential growth. Understanding the lessons from the game software business presented in this book, managers, researchers, and policymakers can gain insight into the mechanisms leading to industrial maturity and clues to avoid the development productivity dilemma.

This is the first book that comprehensively describes the history of the game software industry in Japan. A major objective here is to identify the key determinants of the emergence of the business, the maturing of the market, and the changes brought about by innovations, based on the history of the Japanese industry. To date, similar books have focused only on particular topics of the game software industry, such as the success of Nintendo and Sony and the uniqueness of the Japanese industry. There are no books that interpret the development process of this industry from the point of view of innovation. To fully understand the business and derive insightful lessons from it, however, requires a careful and thorough examination of its development process. Currently, many companies aim to improve efficiency by using information and communications technology (ICT), but it is difficult to maintain a balance between the pursuit of efficiency and the encouragement of creativity. In the case of Japan's game software industry, firms have pursued higher efficiency in product development to build competitive advantage, resulting in a low rate of radical innovation and causing the slow growth of the industry. In certain situations, the development activities that target the creation of new products may, in themselves, hinder the creation of truly new products. This book conceptualizes this phenomenon as a "development productivity dilemma" and clarifies the mechanisms behind it. The dilemma, like the productivity dilemma in the manufacturing industry, evokes a certain innovation pattern and prevents potential growth. Understanding the lessons from the game software business presented in this book, managers, researchers, and policymakers can gain insight into the mechanisms leading to industrial maturity and clues to avoid the development productivity dilemma.

This book integrates the concept of design into the existing framework of industrial performance, international trade and comparative advantage in trade and industrial phenomena, which increasingly have been affected by design characteristics of tradable goods. Design, capability and their evolution are introduced into current theories of trade to explain the reality of international trade in the early twenty-first century and the possibility of design-based comparative advantage is explored. Toward that end, the concepts of design, architecture, organizational capability and productivity are introduced, as are their interactions and evolution. The author starts from the fact that firms' selection of design locations precedes that of production locations and that a new product's initial production location is usually the same as its design location. In other words, design matters in explaining today's trade phenomena. Thus, this book analyzes product design and its evolution in the context of the comparative advantage theory. The author argues that the concept of Ricardo's comparative advantage must be reinterpreted in a more dynamic way than in the past, with changing labor input coefficients treated as variables and driven by international capability-building competition between factories. Some of the many topics dealt with in this volume include a capability-architecture view of industrial comparative advantage, a design-based view of manufacturing, the evolution of manufacturing capabilities, Ricardian comparative advantage with changing labor input coefficients, comparative design cost and selection of design locations and a design process model behind comparative design cost. In this way, the behaviors of factories, product development projects, firms, industries and national economies in today's global competition are described and analyzed in the most realistic way.