IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i3p726-d202034.html
   My bibliography  Save this article

Winner-Takes-All or Co-Evolution among Platform Ecosystems: A Look at the Competitive and Symbiotic Actions of Complementors

Author

Listed:
  • Yuki Inoue

    (Human Augmentation Research Center, National Institute of Advanced Industrial Science and Technology, 2-3-26, Aomi, Koto-Ku, Tokyo 135-0064, Japan)

Abstract

Technological platforms such as hardware or systems form platform ecosystems, which are communities orchestrated by platform providers, outside complementors such as software providers, and consumers. Previous studies have suggested that a winner-takes-all situation among platform ecosystems could be induced by interactions between complementors and consumers. However, our observation of the Japanese video game market over the last 30 years indicated that complementors (i.e., software providers) usually seek to avoid winner-takes-all situations and, instead, promote symbiotic situations. Using the Lotka–Volterra equations from biology as a reference, we developed a model to understand the competitive behavior of complementors among platform ecosystems. We used a 19-year (1996–2015) dataset on the Japanese video game market and confirmed that complementors took as many actions to create symbiotic situations as they took to create winner-takes-all situations, if not more. Our results show that such actions by complementors are influenced by several factors of platform ecosystems. This study also suggests that certain complementors that contribute to symbiotic co-existence within a platform ecosystem could emerge as keystone firms/companies. These complementors could contribute to the sustainability of platform-based markets and facilitate the co-existence of multiple platform ecosystems.

Suggested Citation

  • Yuki Inoue, 2019. "Winner-Takes-All or Co-Evolution among Platform Ecosystems: A Look at the Competitive and Symbiotic Actions of Complementors," Sustainability, MDPI, vol. 11(3), pages 1-25, January.
  • Handle: RePEc:gam:jsusta:v:11:y:2019:i:3:p:726-:d:202034
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/3/726/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/11/3/726/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ruutu, Sampsa & Casey, Thomas & Kotovirta, Ville, 2017. "Development and competition of digital service platforms: A system dynamics approach," Technological Forecasting and Social Change, Elsevier, vol. 117(C), pages 119-130.
    2. Polli, Rolando & Cook, Victor, 1969. "Validity of the Product Life Cycle," The Journal of Business, University of Chicago Press, vol. 42(4), pages 385-400, October.
    3. Church, Jeffrey & Gandal, Neil, 1992. "Network Effects, Software Provision, and Standardization," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 85-103, March.
    4. Gawer, Annabelle, 2014. "Bridging differing perspectives on technological platforms: Toward an integrative framework," Research Policy, Elsevier, vol. 43(7), pages 1239-1249.
    5. R. Preston Mcafee & Hugo M. Mialon & Sue H. Mialon, 2010. "Do Sunk Costs Matter?," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 323-336, April.
    6. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
    7. Jean-Charles Rochet & Jean Tirole, 2003. "Platform Competition in Two-Sided Markets," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 990-1029, June.
    8. Elena-Teodora Miron & Anca Alexandra Purcarea & Olivia Doina Negoita, 2018. "Modelling Perceived Risks Associated to the Entry of Complementors’ in Platform Enterprises: A Case Study," Sustainability, MDPI, vol. 10(9), pages 1-18, September.
    9. Kim, Jin-Hyuk & Prince, Jeffrey & Qiu, Calvin, 2014. "Indirect network effects and the quality dimension: A look at the gaming industry," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 99-108.
    10. Hagiu, Andrei & Wright, Julian, 2015. "Multi-sided platforms," International Journal of Industrial Organization, Elsevier, vol. 43(C), pages 162-174.
    11. Binken, J.L.G. & Stremersch, S., 2008. "The Effect of Superstar Software on Hardware Sales in System Markets," ERIM Report Series Research in Management ERS-2008-025-MKT, 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.
    12. Harikesh Nair & Pradeep Chintagunta & Jean-Pierre Dubé, 2004. "Empirical Analysis of Indirect Network Effects in the Market for Personal Digital Assistants," Quantitative Marketing and Economics (QME), Springer, vol. 2(1), pages 23-58, March.
    13. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & David P. McIntyre & Arati Srinivasan, 2017. "Networks, platforms, and strategy: Emerging views and next steps," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 141-160, January.
    14. Feng Zhu & Marco Iansiti, 2012. "Entry into platform‐based markets," Strategic Management Journal, Wiley Blackwell, vol. 33(1), pages 88-106, January.
    15. Jennifer Johns, 2006. "Video games production networks: value capture, power relations and embeddedness," Journal of Economic Geography, Oxford University Press, vol. 6(2), pages 151-180, April.
    16. Inoue, Yuki & Tsujimoto, Masaharu, 2018. "New market development of platform ecosystems: A case study of the Nintendo Wii," Technological Forecasting and Social Change, Elsevier, vol. 136(C), pages 235-253.
    17. Kevin J. Boudreau & Lars B. Jeppesen, 2015. "Unpaid crowd complementors: The platform network effect mirage," Strategic Management Journal, Wiley Blackwell, vol. 36(12), pages 1761-1777, December.
    18. Eric K. Clemons & Il-Horn Hann & Lorin M. Hitt, 2002. "Price Dispersion and Differentiation in Online Travel: An Empirical Investigation," Management Science, INFORMS, vol. 48(4), pages 534-549, April.
    19. Yong Zha & Jiahong Zhang & Xiaohang Yue & Zhongsheng Hua, 2015. "Service supply chain coordination with platform effort-induced demand," Annals of Operations Research, Springer, vol. 235(1), pages 785-806, December.
    20. Huotari, Pontus & Järvi, Kati & Kortelainen, Samuli & Huhtamäki, Jukka, 2017. "Winner does not take all: Selective attention and local bias in platform-based markets," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 313-326.
    21. Kang, Jin-Su & Downing, Stephen, 2015. "Keystone effect on entry into two-sided markets: An analysis of the market entry of WiMAX," Technological Forecasting and Social Change, Elsevier, vol. 94(C), pages 170-186.
    22. José López-Sánchez & José Arroyo-Barrigüete & Domingo Ribeiro, 2008. "Development of a technological competition model in the presence of network effects from the modified law of Metcalfe," Service Business, Springer;Pan-Pacific Business Association, vol. 2(2), pages 83-98, June.
    23. Venkatesh Shankar & Barry L. Bayus, 2003. "Network effects and competition: an empirical analysis of the home video game industry," Strategic Management Journal, Wiley Blackwell, vol. 24(4), pages 375-384, April.
    24. Kung, Ling-Chieh & Zhong, Guan-Yu, 2017. "The optimal pricing strategy for two-sided platform delivery in the sharing economy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 101(C), pages 1-12.
    25. Yuki Inoue & Masaharu Tsujimoto, 2018. "Genres Of Complementary Products In Platform-Based Markets: Changes In Evolutionary Mechanisms By Platform Diffusion Strategies," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(01), pages 1-32, January.
    26. Amrit Tiwana, 2015. "Evolutionary Competition in Platform Ecosystems," Information Systems Research, INFORMS, vol. 26(2), pages 266-281, June.
    27. Maurizio Zollo & Sidney G. Winter, 2002. "Deliberate Learning and the Evolution of Dynamic Capabilities," Organization Science, INFORMS, vol. 13(3), pages 339-351, June.
    28. Corts, Kenneth S. & Lederman, Mara, 2009. "Software exclusivity and the scope of indirect network effects in the U.S. home video game market," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 121-136, March.
    29. Lamar Pierce, 2009. "Big losses in ecosystem niches: how core firm decisions drive complementary product shakeouts," Strategic Management Journal, Wiley Blackwell, vol. 30(3), pages 323-347, March.
    30. Wang, Xiaolei & He, Fang & Yang, Hai & Oliver Gao, H., 2016. "Pricing strategies for a taxi-hailing platform," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 212-231.
    31. Marchand, André & Hennig-Thurau, Thorsten, 2013. "Value Creation in the Video Game Industry: Industry Economics, Consumer Benefits, and Research Opportunities," Journal of Interactive Marketing, Elsevier, vol. 27(3), pages 141-157.
    32. Eocman Lee & Jeho Lee & Jongseok Lee, 2006. "Reconsideration of the Winner-Take-All Hypothesis: Complex Networks and Local Bias," Management Science, INFORMS, vol. 52(12), pages 1838-1848, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gregor Langus & Vilen Lipatov, 2021. "Does Envelopment through Data Advantage Call for New Regulation?," CESifo Working Paper Series 8932, CESifo.
    2. Maximilian Julius Krome & Ulrich Pidun, 2023. "Conceptualization of research themes and directions in business ecosystem strategies: a systematic literature review," Management Review Quarterly, Springer, vol. 73(2), pages 873-920, June.
    3. Yuki Inoue & Masataka Hashimoto & Takeshi Takenaka, 2019. "Effectiveness of Ecosystem Strategies for the Sustainability of Marketplace Platform Ecosystems," Sustainability, MDPI, vol. 11(20), pages 1-33, October.
    4. Changhee Yoon & Seungyeon Moon & Heesang Lee, 2022. "Symbiotic Relationships in Business Ecosystem: A Systematic Literature Review," Sustainability, MDPI, vol. 14(4), pages 1-15, February.
    5. Bixiang Shi & Fangcheng Tang & Fenfen Wei, 2022. "The Path Constitution of Platform Evolution: An Organizational Momentum View," Sustainability, MDPI, vol. 14(15), pages 1-22, July.
    6. Inoue, Yuki, 2021. "Indirect innovation management by platform ecosystem governance and positioning: Toward collective ambidexterity in the ecosystems," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    7. Cenamor, Javier, 2021. "Complementor competitive advantage: A framework for strategic decisions," Journal of Business Research, Elsevier, vol. 122(C), pages 335-343.
    8. Yuki Inoue & Takeshi Takenaka & Koichi Kurumatani, 2019. "Sustainability of Service Intermediary Platform Ecosystems: Analysis and Simulation of Japanese Hotel Booking Platform-Based Markets," Sustainability, MDPI, vol. 11(17), pages 1-22, August.
    9. Miremadi, Iman & Khoshbash, Mostafa & Saeedian, MohammadMahdi, 2023. "Fostering generativity in platform ecosystems: How open innovation and complexity interact to influence platform adoption," Research Policy, Elsevier, vol. 52(6).
    10. Xintian Wang & Hai Wang, 2019. "A Study on Sustaining Corporate Innovation with E-Commerce in China," Sustainability, MDPI, vol. 11(23), pages 1-16, November.
    11. Qiao Guangshun, 2023. "Survival of the Fittest: The Long-run Productivity Analysis of the Listed Information Technology Companies in the US Stock Market," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 17(1), pages 1-11, January.
    12. Liu, Weihua & Yan, Xiaoyu & Li, Xiang & Wei, Wanying, 2020. "The impacts of market size and data-driven marketing on the sales mode selection in an Internet platform based supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    13. Haruo Awano & Masaharu Tsujimoto, 2021. "The Mechanisms for Business Ecosystem Members to Capture Part of a Business Ecosystem’s Joint Created Value," Sustainability, MDPI, vol. 13(8), pages 1-20, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yuki Inoue & Masataka Hashimoto & Takeshi Takenaka, 2019. "Effectiveness of Ecosystem Strategies for the Sustainability of Marketplace Platform Ecosystems," Sustainability, MDPI, vol. 11(20), pages 1-33, October.
    2. Inoue, Yuki, 2021. "Indirect innovation management by platform ecosystem governance and positioning: Toward collective ambidexterity in the ecosystems," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    3. Yuki Inoue & Takeshi Takenaka & Koichi Kurumatani, 2019. "Sustainability of Service Intermediary Platform Ecosystems: Analysis and Simulation of Japanese Hotel Booking Platform-Based Markets," Sustainability, MDPI, vol. 11(17), pages 1-22, August.
    4. Nishikawa, Bruna T. & Orsato, Renato J., 2021. "Professional services in the age of platforms: Towards an analytical framework," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    5. Fabian Schueler & Dimitri Petrik, 2022. "Objectives of platform research: A co-citation and systematic literature review analysis," Papers 2202.08822, arXiv.org.
    6. Cenamor, Javier & Frishammar, Johan, 2021. "Openness in platform ecosystems: Innovation strategies for complementary products," Research Policy, Elsevier, vol. 50(1).
    7. Joost Rietveld & J. P. Eggers, 2018. "Demand Heterogeneity in Platform Markets: Implications for Complementors," Organization Science, INFORMS, vol. 29(2), pages 304-322, April.
    8. Jacobides, Michael G. & Cennamo, Carmelo & Gawer, Annabelle, 2024. "Externalities and complementarities in platforms and ecosystems: From structural solutions to endogenous failures," Research Policy, Elsevier, vol. 53(1).
    9. Inoue, Yuki & Tsujimoto, Masaharu, 2018. "New market development of platform ecosystems: A case study of the Nintendo Wii," Technological Forecasting and Social Change, Elsevier, vol. 136(C), pages 235-253.
    10. Yuki Inoue & Takeshi Takenaka & Takami Kasasaku & Tadafumi Tamegai & Ryohei Arai, 2023. "How to design platform ecosystems by intrapreneurs: Implications from action design research on IoT-based platform," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-26, December.
    11. Xing Wan & Javier Cenamor & Geoffrey Parker & Marshall Van Alstyne, 2017. "Unraveling Platform Strategies: A Review from an Organizational Ambidexterity Perspective," Sustainability, MDPI, vol. 9(5), pages 1-18, May.
    12. Carmelo Cennamo & Hakan Ozalp & Tobias Kretschmer, 2018. "Platform Architecture and Quality Trade-offs of Multihoming Complements," Information Systems Research, INFORMS, vol. 29(2), pages 461-478, June.
    13. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & David P. McIntyre & Arati Srinivasan, 2017. "Networks, platforms, and strategy: Emerging views and next steps," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 141-160, January.
    14. Peters, Frank, 2018. "The business of video games is a multi-player game : Essays on governance choices and performance in a two-sided market in the cultural industries," Other publications TiSEM 886b3148-4bbb-4ea4-b666-0, Tilburg University, School of Economics and Management.
    15. Richard T. Gretz & Ashwin Malshe & Carlos Bauer & Suman Basuroy, 2019. "The impact of superstar and non-superstar software on hardware sales: the moderating role of hardware lifecycle," Journal of the Academy of Marketing Science, Springer, vol. 47(3), pages 394-416, May.
    16. Tommy Pan Fang & Andy Wu & David R. Clough, 2021. "Platform diffusion at temporary gatherings: Social coordination and ecosystem emergence," Strategic Management Journal, Wiley Blackwell, vol. 42(2), pages 233-272, February.
    17. Bixiang Shi & Fangcheng Tang & Fenfen Wei, 2022. "The Path Constitution of Platform Evolution: An Organizational Momentum View," Sustainability, MDPI, vol. 14(15), pages 1-22, July.
    18. Rietveld, G.J. & Eggers, J.P., 2016. "Demand Heterogeneity and the Adoption of Platform Complements," ERIM Report Series Research in Management ERS-2016-003-STR, 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.
    19. Joost Rietveld & Melissa A. Schilling & Cristiano Bellavitis, 2019. "Platform Strategy: Managing Ecosystem Value Through Selective Promotion of Complements," Organization Science, INFORMS, vol. 30(6), pages 1232-1251, November.
    20. Huotari, Pontus & Järvi, Kati & Kortelainen, Samuli & Huhtamäki, Jukka, 2017. "Winner does not take all: Selective attention and local bias in platform-based markets," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 313-326.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:3:p:726-:d:202034. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.