How does user participation mode of “User-led” and “Firm-led” realize product innovation?

Realizing value co-creation through user participation is essential in user-firm community management and user innovation research. Drawing on the experience-dominant logic, we examine community collaborative action in the context of the most popular Chinese video game, Tale of Immortal, and its community from a virtual alliance perspective. We identify two distinct paths of user participation: “User-led” and “Firm-led.” Our findings are as follows: Firstly, the consensus of motive activation between users and the firm is the basis of community collaborative actions. Secondly, activated motivation produces community collaborative actions, including users’ “content production and information providing” actions and the firm’s “rule arrangement and digital technology construct” actions, which require an appropriate matching process. We propose a framework of firm-user virtual alliance in product innovation and investigate how collaborative action forms and affects innovation in depth. This study equips game studios with understanding of community users’ behavior and helps manage heterogeneous users effectively.