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Competition is commonly understood as a process where the market shares are reallocated from the less efficient firms towards the more efficient ones. Within the evolutionary framework it is also emphasized that innovation is an important competitive weapon that will allow the firm to escape fierce price competition. The findings from the Finnish games industry suggest that efficiency and market shares are not an insightful way to analyze competition as the size of the market is not constant even in the short run, the products are far from being perfect substitutes and, as it is a case of steep increasing returns, the efficiency in game development is not of prime importance. Also, additional consideration should be given to the competition over resources and the way in which competition both encourages and restricts innovation.