Electronic word of mouth and new releases: An empirical study in video games industry

Abstract

In today's world, product iterations continue to accelerate, new product introduction becomes more and more frequent. Marketers are also utilizing digital marketing tools to realize a more efficient conversion from marketing efforts to sales performance. Content marketing and the corresponding electronic word-of-mouth (eWOM) are examples that digital marketing tools used more and more frequently today. This research aims to uncover the effect of prerelease eWOM on new products' short-term and long-term sales performance and to discover the moderator roles of free sample and company awareness. I was indented to build a dynamic regression model that can use prerelease eWOM data to predict future sales performance. However, there are too many blocks to collect and process open data sources to a usable panel data. I collect the analysis data through Steam in the video games industry. The present research uses linear regression analysis and moderation analysis to solve the research question on the prerelease eWOM effect and the moderator roles. The analysis result shows that audience reaction volume significantly affects longterm and short-term sales performance. Free sample and company awareness can negatively influence the prerelease eWOM effect. The analysis model also suggests that the impact of using prerelease publicity (from 0 to 1) may be very different from increasing the number of prerelease publicity (an increase from 1), and the effect of using prerelease publicity may be negative. Therefore, driving the audience reaction volume is the most crucial factor for a successful prerelease digital campaign. The research results on the moderator roles of free sample and company awareness give different companies using different product pricing models trailed suggestions on making the prerelease marketing strategy. In general, products not offering free samples or from unwell-known companies should leverage the prerelease eWOM effect from focusing on increasing audience reaction volume.