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Platform Competition in the Video Game Console Industry: Impacts of Software Quality and Exclusivity on Market Share

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  • Haeyop Song
  • Jaemin Jung
  • Daegon Cho

Abstract

This study examines impacts of the complementary products on platform competition, in the context of video game consoles. Using 10-year panel data, the results demonstrate that high-quality software has a disproportionately significant effect on hardware demand. The high-quality exclusive software is an important factor affecting consumers’ utility, and it tends to be developed in hardware manufacturers’ vertically integrated subsidiaries. In addition, this study also identifies that high-quality multi-homing software plays a role in platform growth in a platform’s later stage.

Suggested Citation

  • Haeyop Song & Jaemin Jung & Daegon Cho, 2017. "Platform Competition in the Video Game Console Industry: Impacts of Software Quality and Exclusivity on Market Share," Journal of Media Economics, Taylor & Francis Journals, vol. 30(3), pages 99-120, July.
    • Handle: RePEc:taf:jmedec:v:30:y:2017:i:3:p:99-120
    DOI: 10.1080/08997764.2018.1449750
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    Cited by:

    1. Cenamor, Javier & Frishammar, Johan, 2021. "Openness in platform ecosystems: Innovation strategies for complementary products," Research Policy, Elsevier, vol. 50(1).
    2. Ricarda Schauerte & Stéphanie Feiereisen & Alan J. Malter, 2021. "What does it take to survive in a digital world? Resource-based theory and strategic change in the TV industry," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(2), pages 263-293, June.
    3. Sebastian Wai, 2022. "Software quality and backward compatibility in the video game industry," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(3), pages 545-570, September.
    4. Cenamor, Javier, 2021. "Complementor competitive advantage: A framework for strategic decisions," Journal of Business Research, Elsevier, vol. 122(C), pages 335-343.
    5. 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).

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