Software multihoming to distal markets: Evidence of cannibalization and complementarity in the video game console industry

Author:

Wiegand NicoORCID,Peers YuriORCID,Bleier AlexanderORCID

Abstract

AbstractSteady software supply is a crucial driver of platform sales. While publishers benefit from releasing software across multiple platforms to tap a greater market, platform manufacturers often seek exclusive release to differentiate from competitors. Research has examined such software multihoming across competing platforms of the same technology generation (i.e., the proximal market); however, publishers increasingly multihome software to platforms in distal markets. In the video game console industry, these include previous-generation consoles, handhelds, or mobile devices. This study investigates multihoming to distal markets in the seventh and eighth game console generations. Whereas multihoming to previous-generation consoles cannibalizes focal console sales, multihoming to mobile devices exerts complementary effects. Software quality and console age moderate these relationships, with negative spillovers from multihoming to previous-generation consoles being rooted in lower-quality games and games released later in the console’s lifecycle. By contrast, multihoming to mobile devices is most beneficial early on.

Publisher

Springer Science and Business Media LLC

Subject

Marketing,Economics and Econometrics,Business and International Management

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