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Investigating How Network Effect, Affect the Success of Platform Complements in the Video Game Industry

Jadidzadeh, Elahe | 2024

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 57790 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Miremadi, Iman
  7. Abstract:
  8. This research examines the impact of indirect network effects in platforms on the likelihood of success for platform complements. The main question addressed by this study is: How does a larger number of complements in a platform ecosystem, through access to diverse resources and knowledge, influence the enhancement of innovation and the likelihood of success for platform complements? While the expansion of indirect networks creates more opportunities for innovation and access to resources on one hand, it may also lead to negative effects such as increased competition among complements and user confusion on the other. The goal of this research is to provide a comprehensive answer to these questions. The findings of this research can help companies in the video game industry, including platform owners, investors, and game developers, to better understand the factors influencing the success of platform complements. Improved performance of complements within the platform ecosystem increases their motivation to operate within this ecosystem, leading to higher user adoption rates and benefiting all members of the platform ecosystem. To address these questions, data from Crunchbase on 11,990 game developers was used. The results indicate that the expansion of indirect networks enhances the capacity for value creation and increases the likelihood of success for complements. Additionally, part of the effect of indirect network effects on the success of complements is mediated through innovation. Moreover, an examination of Mobile and PC-console platforms shows that platforms more focused on the video game industry positively moderate the effect of indirect network effects on innovation. Finally, this study suggests that platforms should intelligently manage openness to strengthen their indirect networks and foster innovations. Such strategies can create an environment where complements thrive, and the overall value of the platform ecosystem is enhanced
  9. Keywords:
  10. Network Effects ; Innovation ; Platform Ecosystems ; Video Games ; Platform Complements