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Platform selection by software developers: Theory and evidence

Author

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  • Maruyama, Masayoshi
  • Flath, David
  • Minamikawa, Kazumitsu
  • Ohkita, Kenichi
  • Zennyo, Yusuke

Abstract

This paper analyzes platform selection (affiliation) by game developers in the Japanese home video game industry. We develop an elementary model of affiliation by software developers and propose the hypothesis that wider availability of game titles for a platform positively inclines game developers to affiliate with that platform when releasing new game titles. Then, using data for Japan, we estimate a multinomial logit model that includes both the attributes of game developers and the characteristics of platforms, and find evidence supporting this hypothesis. Overall, the findings suggest that game developers expect the indirect network effect to apply, and the prospect of future growth matters to them when deciding with which platform to affiliate.

Suggested Citation

  • Maruyama, Masayoshi & Flath, David & Minamikawa, Kazumitsu & Ohkita, Kenichi & Zennyo, Yusuke, 2015. "Platform selection by software developers: Theory and evidence," Journal of the Japanese and International Economies, Elsevier, vol. 38(C), pages 282-303.
    • Handle: RePEc:eee:jjieco:v:38:y:2015:i:c:p:282-303
    DOI: 10.1016/j.jjie.2015.10.003
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    References listed on IDEAS

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    Cited by:

    1. Hao Chen & Hai-Tao Chen, 2021. "The role of social network sites on the relationship between game users and developers: an evolutionary game analysis of virtual goods," Information Technology and Management, Springer, vol. 22(2), pages 67-81, June.

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    More about this item

    Keywords

    Video game; Software; Platform selection; Indirect network effects;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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