This study examines how innovativeness and quality signals may impact the success of video game sequels. Using a sample of 519 sequels released on the PlayStation 2 between 2000-2011, it studies the effects of quality signals (e.g., user and critic ratings, awards, star power, media adaptation) and innovativeness (e.g., genre departure, title departure, developer departure and innovation awards) on a sequel’s cumulative unit sales. Quality signals are positively associated with sequel success, but no support is found for an inverted U-shape relationship between innovativeness and the success of a sequel. The impact of innovativeness on unit sales is moderated by the strength of the quality signals. High levels of innovativeness are detrimental to sales only for sequels with strong quality signals but not for those with weak signals. Sequels with stronger quality signals face public scrutiny, and are hurt more when deviating from the parent game.

 Keywords: video game industry, signaling, product innovativeness