Playing against the platform: A research note on the impact of exclusivity under vertical competition in video game platforms

• Published in: Technological forecasting & social change 2023-06, Vol.191, p.122501, Article 122501
• Main Authors: Castro, Henrique Ribeiro, Sant'Anna, Dário A.L.M.
• Format: Article
• Language: English
• Subjects: Digital platform; Ecosystem; Exclusivity; Vertical competition
• ISSN: 0040-1625
• DOI: 10.1016/j.techfore.2023.122501

The video game industry has experienced impressive growth and technological advancements over the last few years. This paper addresses a more nuanced conceptualization of the indirect network effect of the exclusivity of complements on a video game platform ecosystem, bringing a different theoretical approach from the bulk of the literature by focusing on the effects of exclusive agreements on complementors' performance, rather than on the performance of the platform itself. This issue is of interest given the existence of vertical competition between the platform owner and its complementors, which might raise strategic contingencies for the latter. Moreover, this study seeks to disentangle the effects of exclusivity on sales performance through different characteristics and distinct features inside and between platform ecosystems. The findings indicate that exclusive game titles perform worse than non-exclusive games if they are published by third parties when compared to in-house studios. Moreover, this effect is stronger when published in a platform with higher vertical competition. •This research focuses on the issue of vertical competition in platform ecosystems, using videogame platforms to test this phenomenon empirically.•This study expand the knowledge on the consequences for complementors (rather than for the platform itself) of exclusivity and vertical competition, by analyzing how complementors' performance is affected by exclusive commitments in different platforms.•We propose a mechanism to disentangle the effects of exclusivity and sales performance through different characteristics within and distinct features between platforms ecosystems.•The findings suggest that exclusive game titles perform worse than non-exclusive games if they are published by third parties when compared to in-house studios.