Innovative products often lead to a boom of imitation, and sometimes a bust.

Over 700,000 Atari game cartridges including E.T., a 1982 Atari video game, have been found in Alamogordo’s dusty landfill. This grim trove of artifacts represents the 1983 video games crash. Companies like Atari simply threw their cartridges in trash.

How did Atari’s popularity soar exponentially, only for it to plummet in a matter of hours? Many imitations of Atari’s original games, such as Space Invaders or Centipede, appeared in the marketplace shortly after they were released.

In order to profit from the success of the original company and other imitators, successful ideas are often copied and reproduced. There are, for example, more than 20 movie sequels to Marvel’s “Avengers” and “X-Men.”

In the early 1980s, Atari games became increasingly popular and entrepreneurs began to copy and modify the computer code in order to create knockoffs like Pushky and Pushky and Catterpiggle. Copycats copied the original code and copied copies of the original, so the original coders behind the pioneering Atari games like Pong, Combat, and Super Breakout were not directly involved. The sheer volume of copycat game designers diluted their creativity.

Our international team of researchers studies this phenomenon and calls it the “dilution of expertise.” In a recently published study we examined how replication and imitation affect a product by asking: Were there measurable warning signs before the collapse of a multimillion-dollar market as Atari saw? This research will help investors and consumers better understand creative product cycles and trends.

Boom-and-bust cycles

This issue was tackled by our team using our collective knowledge in network theory and anthropology as well as evolutionary biology and cultural evolution. Three case studies were reviewed that examined creative products that experienced different phases: explosive growth, and collapse.

Atari games, cryptocurrencies, and Reddit postings, an online community, were the case studies. Each of these examples had undergone a “boom and bust” cycle beginning with a rapid rise and ending with a sudden decline. Each of these examples were marked by substantial numbers of knockoffs that competed to get consumer attention and money and inundated markets, effectively diluting the pioneering expertise.

It is easy to create knockoffs using both words and code. Because minor changes in text or computer codes can count as a new product version, it is very simple to make them.

Reddit posts are, for example, short messages written in English that often mirror previous posts with minor modifications. Atari games were a collection of 8 bit machine code sequences. They were shared by programmers within the company, and could also have been copied, reverse-engineered, or duplicated by other companies. The white papers for cryptocurrency are easily accessible documents in English that contain technical information about both the currency and the company.

Can imitation predict failure?

Our team assessed the case studies for repetition or what we call lexical diversity. The team also evaluated them for uniqueness, which our team calls information density. For example, “Hello, hello hello!” is more repetitive than “Hello, how are you?” “Hello, how are you?” is also more varied, as it includes new words that cannot be found in the other example.

Comparisons of the uniqueness or repetition of a product can produce measures similar to plagiarism scores. The ratio of repetition and originality should decrease if new texts are copied from older texts.

We found that each of our case studies showed a gradual decline in originality, which was accompanied by a drop in the number of products. Atari’s number of videogames grew exponentially between 1980-83. This period of immense productivity is correlated to Atari’s constant loss of originality in its computer code.

The result was that the underlying code for these games became more complex and repetitive with each copy. Imitation and the replication of the original games’ content contributed greatly in the run-up to the market collapse.

Innovation as a process of collaboration

Copycats can make modifications to the product that are not made by the original experts. This can lead to the original ideas of the experts being lost under layers of incremental changes. This “dilution of expertise” describes content that is copied and recopied with little inventive modification. This is similar to making new pitchers from lemonade. Each cup of lemonade you take from the previous batch will be added water.

As copies multiply and products become more popular, the expertise behind pioneering products gets buried further and further, much like the Atari cartridges that are now in the garbage.

Our belief is that expertise is reduced, and original thinking is diminished. Atari eventually had too many Space Invaders-like Atari games. Although there are many cryptocurrencies that look similar to Bitcoin, it is still the most widely used cryptocurrency. Reddit lost interest due to too many posts about stale topics, which led to a decrease in subscribers.

The expert creativity that was a catalyst for innovation is diminished when imitations flood the marketplace. When imitations flood the market, consumers lose interest and investors lose their investment, as in Atari.

Is it possible to see it coming?

You don’t have to imitate other people. Copying successful ideas is key for human culture and technology. Innovation is rarely achieved in isolation. Past ideas are often the foundation of future products.

A booming trend in some creative products will likely bust when the number of copycats vastly outnumbers the supply of fresh ideas or “expertise.” The methodology used for our study may have the potential to predict such a collapse. This analysis could also be applied to more complex systems such as technology patents and music genres in the future. This framework could be expanded to provide insight into the effects of collective imitation.