Group Assignment 2: “It’s Only a Game” Introduction You work as an analyst in the video game...

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Group Assignment 2: “It’s Only a Game” Introduction You work as an analyst in the video game industry and have been asked by your boss to use statistical and data mining techniques to better understand the root causes of game success. Your firm purchased data from the NPD Group, a well-known market research firm, and you have been given this data as a starting point for your analysis. Deliverables Your report should consist of the following: 1. Executive Summary: A concise, business-oriented summary of your findings regarding the root cause(s) of video game success (that is, focus on Questions 5 & 6 below; do not summarize the answers to all the questions). 2. Detailed responses to the questions listed below. Where appropriate, you should include summary data, graphics, statistical tests of significance, regression results, classification trees, etc. in the body of your report (cut and paste from other applications). Remember to walk the reader through your response and explain where the figures and charts come from and what they mean. If you do not know what a chart means, do not include it. You should include a brief description of your methodology for each question and identify any important limitations associated with your approach. 3. Any additional nuggets of information you dig up that can shed light on any “causal” relationships that might exist in this data set
	
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Group Assignment 2: 
“It’s Only a Game” 
Introduction 
You work as an analyst in the video game industry and have been asked by your boss to use 
statistical and data mining techniques to better understand the root causes of game success.  Your 
firm purchased data from the NPD Group, a well-known market research firm, and you have 
been given this data as a starting point for your analysis. 
Deliverables 
Your report should consist of the following: 
1. Executive Summary: A concise, business-oriented summary of your findings regarding 
the root cause(s) of video game success (that is, focus on Questions 5 & 6 below; do not 
summarize the answers to all the questions). 
2. Detailed responses to the questions listed below. Where appropriate, you should include 
summary data, graphics, statistical tests of significance, regression results, classification 
trees, etc. in the body of your report (cut and paste from other applications).  Remember 
to walk the reader through your response and explain where the figures and charts come 
from and what they mean.  If you do not know what a chart means, do not include it.  
You should include a brief description of your methodology for each question and 
identify any important limitations associated with your approach. 
3. Any additional nuggets of information you dig up that can shed light on any “causal” 
relationships that might exist in this data set. 
Questions 
1. Create a histogram of LTD (life-to-date) sales.  Are the sales of games normally 
distributed?  How might you make the distribution more normal?  Create a histogram of 
your solution. 
2. What is the average, minimum, and maximum value of first year sales achieved by a 
video game?  Note that the value of “first year sales” is the total amount of sales in the 
calendar year (e.g., 2002) in which the game was released. 
a. Can you identify any shortcomings of the “first year sales” variable as a response 
variable?...

David · Accepted Answer

Executive Summary 
Video games today are longer child’s play today – it is multi-billion dollar industry.  An industry which is 
beaming with opportunities and growing with confidence. This is also an industry of fierce competition. 
To be successful in this industry one needs to know the key determinants of this industry before 
launching a new video game.  
In our analyses, we have used two separate methods to find out the significant determinants of market 
performance. The first method that we have used is linear regression. We have use logarithm of LTS 
Sales as a measure of market performance of a video game. Using linear regression techniques, we have 
tried to find out significant regressors for this variable – the significant regressors are the determinants. 
Our analysis results in the following determinants - SKU, Super Genre, Sub Genre, Brand, License, 
Publisher, Online and Review Scores. 
We have again used decision trees to find out the set of determinants. The significant participants in the 
decision tree model are the determinants. Here we have defined a new variable – Market Performance 
which is an indicator variable indicating whether a specific video game’s performance is above average 
(good) or below average (bad). We have used CHAID technique to grow the tree. The validation shows 
an overall of 81.8% accuracy in classifying the observations which is pretty high. The determinants from 
this analysis are - Review Score, Online, Prior Release Genre, Concurrent Release Genre, License, ESRB 
and Prior Sales Brand. 
Combining the two analyses, overall the parameters to check before launching a game would be - SKU, 
Super Genre, Sub Genre, Brand, License, Publisher, Online, Review Scores, Prior Release Genre, 
Concurrent Release Genre, ESRB and Prior Sales Brand.
1. The following figure shows the Histogram of LTD Sales:
From the above Histogram, the sales are not normally distributed. 
The distribution can be made more normal by using a logarithmic transformation on the variables. The 
histogram of the transformed variable is given below:
2. The following table shows the average, maximum and minimum values of first year sales 
achieved by a game: 
Descriptive Statistics 
 N Minimum Maximum Mean 
FirstYearSales_m 2245 .00 25.28 .5027 
Valid N (listwise) 2245
a. The following figure shows the histogram of the first year sales:
 
Clearly, the distribution is non-normal. Thus if we consider first year sales as the response variable then 
it will be difficult to construct a model due to its non-normality. Besides, first year sales does not exactly 
denote the entire market performance of a video game during its lifetime. 
b.

Group Assignment 2: “It’s Only a Game” Introduction You work as an analyst in the video game industry and have been asked by your boss to use statistical and data mining techniques to better...

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