scholarly journals Vertical Integration and Exclusivity in Platform and Two-Sided Markets

2013 ◽  
Vol 103 (7) ◽  
pp. 2960-3000 ◽  
Author(s):  
Robin S Lee
Keyword(s):  
Vertical Integration ◽  
Video Game ◽  
Consumer Welfare ◽  
Market Outcomes ◽  
Software Products ◽  
Sixth Generation ◽  
The Us ◽  
Game Industry ◽  
Hardware Platforms ◽  
The Impact

This paper measures the impact of vertically integrated and exclusive software on industry structure and welfare in the sixth-generation of the US video game industry (2000–2005). I specify and estimate a dynamic model of both consumer demand for hardware and software products, and software demand for hardware platforms. I use estimates to simulate market outcomes had platforms been unable to own or contract exclusively with software. Driven by increased software compatibility, hardware and software sales would have increased by 7 percent and 58 percent and consumer welfare by $1.5 billion. Gains would be realized only by the incumbent, suggesting exclusivity favored the entrant platforms. (JEL D12, L13, L22, L63, L86)

IS THERE MORE OR LESS COMPATIBILITY BETWEEN SYSTEMS WHEN CONSUMERS ARE KEENER ON A RIVAL SYSTEM’S SOFTWARE?

2017 ◽  
Vol 65 (04) ◽  
pp. 1065-1072
Author(s):  
CHUNG-HUI CHOU
Keyword(s):  
Video Game ◽  
Price Competition ◽  
American Economic Review ◽  
Theoretical Interpretation ◽  
Theoretic Model ◽  
Hardware Production ◽  
The Us ◽  
Game Theoretic ◽  
Game Industry ◽  
Hardware Platforms

A greater level of keenness on a rival system’s software intuitively motivates system manufacturers to raise their degrees of compatibility in order to capture more profit from selling software to rival system users. After constructing a game-theoretic model to investigate system manufacturers’ partial compatibility decisions, this paper surprisingly finds that when consumers are keener on a rival system’s software, hardware price competition is relaxed and system manufacturers reduce the degrees of compatibility. This paper also presents the following three results. First, partial compatibility occurs when the expenditure on system goods is relatively low. Second, the optimal degree of compatibility increases in the expenditure on system goods and decreases in hardware production cost. Third, system manufactures suffer losses on selling hardware when keenness on a rival system’s software is relatively low. According to Lee (2013), this result provides a theoretical interpretation of the phenomenon that platform providers often sell hardware platforms close or below cost in the US video game industry [Lee, R (2013). Vertical integration and exclusively platform and two-sided markets. American Economic Review, 103, 2960–3000].

scholarly journals The Impact Of Platform On Global Video Game Sales

2013 ◽  
Vol 12 (10) ◽  
pp. 1273
Author(s):  
Jeffry Babb ◽  
Neil Terry ◽  
Kareem Dana
Keyword(s):  
Video Game ◽  
Global Market ◽  
Video Game Industry ◽  
Home Video ◽  
Sixth Generation ◽  
Game Industry ◽  
Second Tier ◽  
Horizontal Expansion ◽  
Global Platform ◽  
The Impact

This paper examines video game sales by platform in the global market from a period spanning 2006 through 2011. As the home video game industry has rapidly matured and become established as a forefront facet of interactive entertainment in the home, we seek to determine what aspects of the video game market have the greatest impact on sales. This question is particularly poignant, as the maturation of the video game industry has witnessed efforts at both vertical integration and horizontal expansion on the part of the top game publishers and developers in hopes of solidly grounding the industry. This study employs a Kruskal-Wallis test to compare eight different gaming platforms. The results indicate Nintendos Wii was the top selling global platform; Nintendo DS was the second tier; Xbox 360, Sony PlayStation 3, and the personal computer (PC) are in the third tier; the fourth tier consists of Sony PlayStation 2 and Sony PSP; and the retired sixth generation Nintendo GameCube is the lowest sales tier.

It and the Video Game Industry: Tensions and Mutual Shaping

2005 ◽  
Vol 20 (4) ◽  
pp. 234-244 ◽  
Author(s):  
Jonathan P Allen ◽  
Jeffrey Kim
Keyword(s):  
Information Technology ◽  
Video Game ◽  
Translation Process ◽  
Video Game Industry ◽  
Storage Media ◽  
Game Industry ◽  
Networking Technologies ◽  
Frame Technology ◽  
Technological Frame ◽  
The Impact

This paper examines the influence of information technology (IT) on a distinct but closely related industry, the video game industry. We conceptualize the effects of IT as a process of translating three related dimensions of a technological frame - technology performance, industry practices, and use vision - from one industry to another. Through historical examples, we argue that the impact of IT on the video game industry is shaped and limited by this translation process, particularly when tensions between the two industries lead to the development of new complementary or replacement technologies, practices, or visions. Although heavily dependent on IT, the video game industry has had to ignore, postpone, or substantially modify important IT software tools, processors, storage media, graphics, and networking technologies because of these industry contradictions.

STUDY OF THE IMPACT OF INTERNATIONAL FINANCIAL CRISIS ON TAIWAN’S GAME INDUSTRY AND INVESTORS

2018 ◽  
Vol 4 (2) ◽  
pp. 13-18
Author(s):  
Bi-Huei Tsai
Keyword(s):  
Financial Crisis ◽  
Stock Returns ◽  
Video Game ◽  
Stock Prices ◽  
Abnormal Returns ◽  
Efficient Market Hypothesis ◽  
Economic Recovery ◽  
Market Reactions ◽  
Game Industry ◽  
The Impact

Purpose of study: This study investigates the change of stock returns during the Lehman Brother’s announcement of bankruptcy in 2008 for the Taiwanese listed video game companies. We further explore the change of stock returns for the Taiwanese listed video game companies after Taiwan’s economy recovers from Lehman Brother’s bankruptcy. Methodology: This study utilizes the event study method to statistically test abnormal returns so as to understand whether the Lehman Brother’s bankruptcy-related event affects stock prices and whether securities prices reflect Lehman Brother’s bankruptcy-related information. Main Findings: The results show a significant negative abnormal rate during Lehman Brother’s declaration of bankruptcy on Sep. 15, 2008. Investors were affected by the financial crisis caused by Lehman Brother’s bankruptcy and fully reflected on the stock prices of that day. In addition, our results show that video game companies have significantly positive returns when most Taiwanese electronics firms stop no-pay leave on March 31, 2009. It represents investors were encouraged by this information and fully reflected on the stock prices. Implications: The results support the efficient market hypothesis. The pattern of CARs experiences a constant increase and displays the apparent price rise during the announcement of no-pay leave stop. The positive abnormal returns are accompanied by the economic recovery. Originality/Novelty: This investigation for the first time chooses the stop of no-pay leave as the indicator of economic recovery from financial crisis. Our analysis novel explores the impact of the financial crisis and the economic recovery on the game industry simultaneously and the results show significantly different market reactions between the occurrence of the financial crisis and economic recovery.

The Impact of COVID-19 on the Video Game Industry

2021 ◽  
Author(s):  
Deniz Şener ◽  
Türkan Yalçın ◽  
Osman Gulseven
Keyword(s):  
Video Game ◽  
Video Game Industry ◽  
Game Industry ◽  
The Impact

Exploring Video Games from an Evolutionary Psychological Perspective

2010 ◽  
pp. 734-742 ◽  
Author(s):  
Zack Mendenhall ◽  
Marcelo Vinhal Nepomuceno ◽  
Gad Saad
Keyword(s):  
Video Games ◽  
Economic Crisis ◽  
Video Game ◽  
High Speed ◽  
Psychological Perspective ◽  
Sales Growth ◽  
Current Economic Crisis ◽  
The Us ◽  
Game Industry ◽  
Sales Figure

Video games are a relatively recent form of entertainment whose sales growth has been enormous (almost 700% from 1996 to 2007), with sales for 2007 reaching 9.5 billion dollars in the US (Entertainment Software Association, 2007). This figure does not include the sales of hardware components such as consoles and accessories, or subscriptions to high-speed Internet providers. To contextualize this sales figure, the US cinema industry garnered 9.6 billion dollars domestically in the same year (MPAA, 2007). The video game industry is so robust that it appears to be impervious to the current economic crisis (Economist, December 20, 2008).

scholarly journals The Competitive Impact of Vertical Integration by Multiproduct Firms

2020 ◽  
Vol 110 (7) ◽  
pp. 2041-2064 ◽  
Author(s):  
Fernando Luco ◽  
Guillermo Marshall
Keyword(s):  
Vertical Integration ◽  
Price Increases ◽  
Beverage Industry ◽  
The Us ◽  
Carbonated Beverage ◽  
Vertical Mergers ◽  
Recent Variation ◽  
The Impact ◽  
New Evidence ◽  
Do So

We study the impact of vertical integration on pricing incentives in multiproduct industries. To do so, we exploit recent variation in vertical structure in the US carbonated-beverage industry. While the elimination of double marginalization with vertical integration is normally characterized as procompetitive, economic theory predicts that it may cause anticompetitive price increases in multiproduct industries. We indeed find that vertical integration causes price decreases in products with eliminated double margins but price increases in the other products sold by the integrated firm. These results provide new evidence of anticompetitive effects of vertical mergers. (JEL D22, D43, G34, L13, L22, L66)

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