The effect of intrinsic and extrinsic quality cues of digital video games on sales: An empirical investigation

Abstract This study examines the effect of product quality cues on sales of digital video games, using signaling theory as a theoretical model. The quality cues are examined from two angles: intrinsic and extrinsic. The intrinsic cues, in this study, include company reputation, newness, and retro features and extrinsic cues include review valence, product popularity, price, and user engagement. Based on a publicly available panel data of 142,590 observations for 5415 digital video games, our empirical results suggest that both intrinsic and extrinsic quality cues affect sales of digital video games. Company reputation of a digital video game, however, does not have a significant effect on sales. Although an overall relationship between price and sales is positive, this is not the case for less popular digital video games. This study provides the implications for IS research and practice.