Erosion of Complement Portfolio Sustainability: Uncovering Adverse Repercussions in Steam’s Refund Policy

Abstract

Maintaining a consistently trending portfolio of complements is vital to sustaining platform leadership. Prior research has highlighted the value of open innovation, but has largely disregarded the strategic identification and management of distinctive complements that drive extended platform value, particularly via platform policy modifications. The relevance of prior research around influential policies such as refund leniency becomes largely irrelevant once applied to platform conditions. Utilizing Steam as the medium of analysis, this paper distinguishes complements into three classifications of sustainability, representing its contribution to developing platform leadership. Steam’s refund policy alteration is investigated for its effects on refund revenue reductions and additional demand on each classification, assessed using an indirectly related linear regression between playtime distribution and game age, and a binomially distributed t-test on the percentage of favorable games. The results reveal that, while all patterns experience significant volumes of refunds, corresponding revenue enhancements are perceived only among unsustainable games. This creates a disadvantageous foundation for high-value complements and consequently, an unforeseen disincentive for association, potentially inciting preferential linkage with competitors. This paper further proposes a precedent for future open innovation and platform management research, where complements of highest relevance are identified and granted heightened priority to protect their sustainability.

Effectiveness of Ecosystem Strategies for the Sustainability of Marketplace Platform Ecosystems

“…For successful open innovation in the ecosystems, the platform's technology openness strategy, complex adaptive systems, and market responses stimulated by technology innovations are important [78,79]. The platform owner must establish the platform policies to foster a sustainable environment of the ecosystem for open innovation between the platform owner and complementors [80]. This study implies that these management for the successful open innovation is significant not only for complementors, but also for physical intermediary firms.…”