How accessories add value to a platform: the role of innovativeness and nonalignability

Abstract

PurposeThis study aims to distinguish between the indispensable (software) versus discretionary (accessories) complementary products to a platform. It investigates the impact of accessories on increasing the perceived value and sales of a base platform. In particular, the role of two distinct characteristics of accessories – innovativeness and structural nonalignability – in driving the sales of the base platform.Design/methodology/approachCombining sales data from the US video gaming industry with primary data on the above two aspects of accessories, this study quantifies the effect of accessories portfolio on the sales of three brands of video gaming platforms.FindingsA distinct network externality arises from accessories for video gaming platforms, above and beyond the effects of game titles. Importantly, the average level of innovativeness and nonalignability of the accessories portfolio, as well as the frequency of introduction of highly innovative and/or nonalignable accessories positively impact the sales of the platform.Research limitations/implicationsThis research seeks to address the gap in the innovation literature on the role of discretionary complementary products (i.e. accessories) on platform sales. Future research should examine this in other platform contexts as well.Practical implicationsManagers of platform-mediated products should give due consideration to accessories, as an important driver of the sales of the platforms. Product managers can leverage the advantage of innovative and nonalignable accessories to enhance consumer demand for the platform.Originality/valueThis study is the first to conceptualize and empirically verify the network externality arising from accessories, a heretofore much neglected component of platform-based markets.