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New market development of platform ecosystems: A case study of the Nintendo Wii

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  • Inoue, Yuki
  • Tsujimoto, Masaharu

Abstract

The platform ecosystem could generate unlimited innovation with outside complementors and various consumers. Some researchers focused on the competition between two platform ecosystems in the same market and constructed theoretical models of indirect network effects between complementors and consumers. However, the implications from these researches might not adapt the platform ecosystem, which aims to explore new markets. This study focuses on a platform ecosystem—the Nintendo Wii—that explores a new market in the Japanese video game industry. We analyze why Wii rapidly declined in spite of its significant initial installed base. Our results show that the strength of indirect network effects for complementors' software provision became relatively small in the case of competition between new and existing markets. Software provision of complementors and software selection of consumers led to the concentration of consumer segments in the new market. Software purchases of consumers in the new markets were dependent on the provider's name and on seasonality and increased the risk for complementors. Consequently, complementors exited from the platform ecosystem of the Wii new market; as a result, more consumers could not participate in the platform ecosystem. Based on the findings, this study makes suggestions for platform ecosystem success.

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  • Inoue, Yuki & Tsujimoto, Masaharu, 2018. "New market development of platform ecosystems: A case study of the Nintendo Wii," Technological Forecasting and Social Change, Elsevier, vol. 136(C), pages 235-253.
    • Handle: RePEc:eee:tefoso:v:136:y:2018:i:c:p:235-253
    DOI: 10.1016/j.techfore.2017.01.017
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    Cited by:

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    2. Cenamor, Javier & Frishammar, Johan, 2021. "Openness in platform ecosystems: Innovation strategies for complementary products," Research Policy, Elsevier, vol. 50(1).
    3. Yuki Inoue & Masataka Hashimoto & Takeshi Takenaka, 2019. "Effectiveness of Ecosystem Strategies for the Sustainability of Marketplace Platform Ecosystems," Sustainability, MDPI, vol. 11(20), pages 1-33, October.
    4. Tsai, Pei-Hsuan, 2020. "Strategic evaluation criteria to assess competitiveness of the service industry in Taiwan," Journal of Policy Modeling, Elsevier, vol. 42(6), pages 1287-1309.
    5. Tsai, Pei-Hsuan & Chen, Chih-Jou, 2021. "Entertainment in retailing: Challenges and opportunities in the TV game console industry," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    6. Gordon, Adam Vigdor & Ramic, Mirza & Rohrbeck, René & Spaniol, Matthew J., 2020. "50 Years of corporate and organizational foresight: Looking back and going forward," Technological Forecasting and Social Change, Elsevier, vol. 154(C).
    7. Bach Quang Ho & Yuki Inoue, 2020. "Driving Network Externalities in Education for Sustainable Development," Sustainability, MDPI, vol. 12(20), pages 1-16, October.
    8. Bixiang Shi & Fangcheng Tang & Fenfen Wei, 2022. "The Path Constitution of Platform Evolution: An Organizational Momentum View," Sustainability, MDPI, vol. 14(15), pages 1-22, July.
    9. Knudsen, Eirik Sjåholm & Belik, Ivan, 2023. "The Achilles heel of interconnected user networks: Network firms and the vulnerability of rapid decline," Technological Forecasting and Social Change, Elsevier, vol. 195(C).
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    11. Peng, Hui & Lu, Yaobin & Gupta, Sumeet, 2023. "Promoting value emergence through digital platform ecosystems: Perspectives on resource integration in China," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    12. Yuki Inoue & Takeshi Takenaka & Koichi Kurumatani, 2019. "Sustainability of Service Intermediary Platform Ecosystems: Analysis and Simulation of Japanese Hotel Booking Platform-Based Markets," Sustainability, MDPI, vol. 11(17), pages 1-22, August.
    13. Miremadi, Iman & Khoshbash, Mostafa & Saeedian, MohammadMahdi, 2023. "Fostering generativity in platform ecosystems: How open innovation and complexity interact to influence platform adoption," Research Policy, Elsevier, vol. 52(6).
    14. Haruo Awano & Masaharu Tsujimoto, 2022. "Mechanisms for Business Ecosystem Members to Capture Value through the Strong Network Effect," Sustainability, MDPI, vol. 14(18), pages 1-13, September.
    15. Pütz, Fabian & Murphy, Finbarr & Mullins, Martin & O'Malley, Lisa, 2019. "Connected automated vehicles and insurance: Analysing future market-structure from a business ecosystem perspective," Technology in Society, Elsevier, vol. 59(C).
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