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A product class is a category of products. Videogames is a product class with several subclasses, including action games, adventure games, role-playing games, and strategy games. You can compete within a product class or subclass or outside it, but you’re competing by product class only when you compete outside the class or subclass — positioning a strategy video game as a better alternative to a strategy board game such as chess, for example, or positioning video games as a better alternative to other forms of entertainment, such as movies.