The Effect of Superstar Software on Hardware Sales in System Markets

Binken, Jeroen; Stremersch, Stefan

doi:10.1509/jmkg.73.2.88

Cited by 132 publications

(176 citation statements)

References 67 publications

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“…Tables 8 and 9 show the Top 10 3 rd party exclusive titles (in terms of quality ranking) for G7 and G6, respectively. These top games are the exclusive games that will affect the competitive positions of each platform and will sell platforms (Binken and Stremersch, 2009 -------------INSERT TABLES 8 AND 9 ABOUT HERE -------------Second, our results provide indicative evidence of the opportunities that more complex platforms offer to complementors that do specialize on the platform. However, as per our empirical results, platform complexity also makes it more difficult to obtain (multihoming) games of similar quality to those on competing systems.…”

Section: Discussionmentioning

confidence: 74%

“…By contrast, Lee's (2013) findings suggest that multihoming can reinforce the leading position of incumbent platforms. For smartphones, Bresnahan et al (2015) find that multihoming can be neutral with regards 5 Indirect network effects imply that complement providers tend to choose platforms with a large existing (or expected) user base (Clements andOhashi 2005, Kretschmer andClaussen 2016), while consumers join platforms with many (current or expected) high-quality complements (Binken andStremersch 2009, Cennamo 2016). Indirect network effects can also be driven by higher willingness to pay of complementors, which then creates a larger subsidy to the user side, which increases user adoption (Seamans and Zhu 2013). to the market share between Android and iOS, since apps that are more attractive and thus have many users will multihome to both platforms.…”

Section: Multihoming: the Benefits And Implicationsmentioning

confidence: 99%

“…Only 3.9% of games become blockbusters in our sample, selling more than 1m copies (the mean is 226,896 units). This high concentration in sales mirrors the skewed distribution of game quality: the average game receives a quality score of 70 out of 100 from professional reviewers, and only 3% of titles achieve "superstar" status -i.e., a score of 90 or above (Binken and Stremersch 2009). These superstars have average sales of 48m USD compared to the 8.6m USD average sales of the rest of the titles.…”

Section: ------------Insert Table 1 About Here -------------mentioning

confidence: 99%

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Platform Architecture and Quality Trade-offs of Multihoming Complements

Cennamo

Özalp

Kretschmer

2018

Information Systems Research

188

142

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Multihoming -the decision to design a complement to operate on multiple platforms -is becoming increasingly common in many platform markets. Perceived wisdom suggests that multihoming is beneficial for complement providers as they expand their market reach, but it reduces differentiation among competing platforms as the same complements become available on different platforms. We argue that complement providers face tradeoffs when designing their products for multiple platform architectures -they must decide how far to specialize the complement to each platform technological specifications. Because of these tradeoffs, multihoming complements can have different quality performance across platforms. In a study of the US video game industry, we find that multihoming games have lower quality performance on a technologically more complex console than on a less complex one. Also, games designed for and released on a focal platform have lower quality performance on platforms they are subsequently multihomed to. However, games that are released on the complex platform with a delay suffer a smaller drop in quality on complex platforms. This has important implications for platform competition, and for managers considering expanding their reach through multihoming. The logic is that multihoming offers potential additional revenues at limited costs for complementors, implicitly assuming that complements are the same on different platforms. But many platforms are not simple (two-sided) markets enabling transactions; they are also technology infrastructures whose features shape the development of third-party complementary products (Anderson et al. 2014;Gawer 2014, Tiwana et al.2010, Yoo et al. 2010. 2 Complements frequently must be tailored to a platform's core technological functions and interface specifications to take full advantage of its performance (Anderson et al. 2014, Claussen et al. 2015b, Tiwana 2015. In developing for multiple platforms, complementors must decide how far to specialize the complement to one platform (Schilling, 2000, Tiwana 2015, Yoo et al. 2010. We ask how the tradeoffs complementors face when designing products for multiple platforms affect the quality performance of multihoming complements across platforms. , Tiwana et al. 2010, Gawer 2014. As a system comprises the platform and its complements, the effect of platform architecture on both platform performance and complement supply matters for value creation at the system level (Cennamo 2016). the core technology components (e.g., processor cores), and the larger the number of specialized processors requiring a specific programming language for optimal utilization (i.e., no clean interface to handle the interdependencies), the more complex the platform. Complement developers must therefore choose to either use that language to optimally "conform" (Tiwana 2015) to the complex platform's specifications at the expense of integration and performance on other platforms, or to design the complement so it uses the lowest common denominator acr...

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Section: Discussionmentioning

confidence: 74%

Section: Multihoming: the Benefits And Implicationsmentioning

confidence: 99%

Section: ------------Insert Table 1 About Here -------------mentioning

confidence: 99%

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Platform Architecture and Quality Trade-offs of Multihoming Complements

Cennamo

Özalp

Kretschmer

2018

Information Systems Research

188

142

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“…Some exceptions are worthwhile to note, as some standards have become locally dominant for long periods, such as Apple with artists and designers and Sony's Betamax videocassette format with broadcasters. In addition, the recent network effects literature has moved beyond considering the total number of users as the only characterization of network effects (Binken & Stremersch, 2009;Tucker, 2008).…”

Section: Network Externalities and Growth Ratesmentioning

confidence: 99%

The chilling effects of network externalities

Goldenberg

Libai

Muller

2010

International Journal of Research in Marketing

191

132

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Conventional wisdom suggests that network effects should drive faster market growth due to the bandwagon effect. However, as we show, network externalities may also create an initial slowdown effect on growth because potential customers wait for early adopters, who provide them with more utility, before they adopt. In this study, we explore the financial implications of network externalities by taking the entire network process into account. Using an agent-based as well as an aggregate-level model, and separating network effects from word of mouth, we find that network externalities have a substantial chilling effect on the net present value associated with new products. This effect may occur not only in a competitive framework, such as a competing standards scenario, but also in the absence of competition. Drawing on the collective action literature in order to relate network effects to individual consumer threshold levels, we find that the chilling effect is stronger with a small variability in the threshold distribution, and is especially affected by the process early on in the product life cycle. We also find a "hockey stick" growth pattern by empirically examining the growth of fax machines, CB radios, CD players, DVD players, and cellular services.

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“…Sobre a externalidade global, o consumidor considera o sistema social inteiro quando avalia a utilidade de um produto em termos de números de adotantes, enquanto sobre externalidade local, o consumidor considera a adoção em relação à sua rede social mais próxima. Pesquisas estão gradualmente considerando externalidades globais em externalidades locais (BINKEN; STREMERSCH, 2009;DELRE;JANSSEN, 2007).…”

Section: Componentes Da Difusão De Novos Produtos 2331 Externalidaunclassified

Estratégias de preço na difusão de inovação: simulação baseada em agentes aplicado ao mercado brasileiro de carros elétricos

Yun¹

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The Effect of Superstar Software on Hardware Sales in System Markets

Cited by 132 publications

References 67 publications

Platform Architecture and Quality Trade-offs of Multihoming Complements

Platform Architecture and Quality Trade-offs of Multihoming Complements

The chilling effects of network externalities

Estratégias de preço na difusão de inovação: simulação baseada em agentes aplicado ao mercado brasileiro de carros elétricos

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