The Launch Timing of New and Dominant Multigeneration Technologies
AbstractIn this paper we introduce a model that is suitable to study the diffusion of new and dominant multi-generation technologies. Examples are computer operat- ing systems, mobile phone standards, video game consoles. Our model incorporates three new features that are not included in related models. First, we add the ability of a firm to transfer users of its old technologies to the new generations, what we call firmsâ€™ alpha. Second, we add competitive relations between market technolo- gies. Third, the launch strategies diagnosed by our model cover, as special cases, the now or never strategies and hence it is suitable to study intermediate launch strategies.We find that the appropriate timing of a new technology depends heavily on both the firmsâ€™ alphas and on the competitive positioning of their products. In addition, we argue that the strategic interaction of firms may lead to very different sales outcomes depending on the competitive positioning of their products. In the VGC case we find that the Nintendo Wii was launched at an appropriate moment while the Sony PS3 perhaps should have never been launched.
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Bibliographic InfoPaper provided by Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam. in its series Research Paper with number ERS-2010-022-MKT.
Date of creation: 31 May 2010
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launch timing; multi-generation diffusion models; video-game industry;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-03 (All new papers)
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