An Explorative Study on the Co-opetition Strategies of Game Console Platform Providers

• Main Authors: Fang-Yang Sheng, 盛方揚
• Other Authors: Ji-Ren Lee
• Format: Others
• Language: zh-TW
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/znmn3d

碩士 === 國立臺灣大學 === 國際企業學研究所 === 105 === Platform-based business model has attracted much attention from both academia and practitioners. The video game console industry represents a typical example for platform-based business model. Game console industry connects the demand side (players) and supply side (game developers) of a bilateral market. Different platform competes rigorously due to network effect, which will lead to winner-to-all consequence. However, the fast development of internet technology makes such competition beyond the level of the console. How major players of the game console industry react to the changes becomes an interesting topic to explore. In this thesis, we will focus on the competitive interactions between Microsoft''s Xbox one and Sony''s PlayStation 4 to unravel respective co-opetition strategy and future consequence. Based on the framework of five-force model and value net, we analyze the structure and competitive logic of game console industry and figure out the key variables which can affect competition. Then, based on the logic of value creation, we discuss the co-opetition strategy of Sony and Microsoft respectively, and provide strategy recommendations. We found three key variables driving the competition among game console players; they are the installed number of console, the game lineup and switching costs. Game console manufacturers attract players and game developers to join the platform by subsidize or enhance the product, to improve the installed number of console and the game lineup. Because of network effects, players and game developers will attract each other, induce a positive feedback and hence achieve the growth of the platform. In the meantime, with the number of installed console, the manufacturers can enhance the bargaining power to suppliers and game developers, to gain profit. Finally, due to the presence of high switching costs of game players, console game companies may win the competition due to winner-take-all situation. While the console game industry becomes mature, its structure and operation are getting stabilized and strategies are more similar. Facing the rise of internet technology and competitive threat from online games, console game manufacturers have to revise their strategy according to their own core competencies and strategic assets. For SONY, it has to expand market coverage to online services based on its strong game portfolio while for Microsoft, it shall leverage its dominant installed base in the PC market to embrace gaming products into its Window’s ecosystem. Research implications and suggestions for future studies are also provided.