Intra-Platform Competition, Exclusivity and Dissimilarity Strategies in the Videogame Industry

This article examines two main strategic tradeoffs a platform firm may face when structuring its content offer. First, we study whether maximizing the amount of content released in exclusivity to the platform complement a strategy aimed at maximizing the content size and variety. Second, we inspect the competitive effect of the degree of dissimilarity (or similarity) across platforms’ offerings. We test these in the U.S. videogame industry over the period 1995-2008. Results show that, for high levels of competition among content producers, implementing these two maximizing strategies in combination mutually reduces each other’s benefits and decreases a platform’s market share. Moreover, moderate levels of a platform’s content dissimilarity decrease a platform’s market share, whereas large degrees of dissimilarity affect positively a platform’s market share.