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

Abstract

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.