@article{8cbb6211e7104760881818a2901e8423,
title = "To port or not to port? Availability of exclusivity in the digital service market",
abstract = "The digital service market is vast and constantly expanding. In the digital service market, platforms such as Netflix, Steam, etc. often seek to enter into exclusivity deals with service providers or developers in order to get exclusive access rights to their digital services in the hopes that offering exclusive access to a digital product will entice new consumers to use their platform and thus generate increased profits. In this study we focus on this phenomenon in the mobile gaming market. For example, the game developer Electronic Arts agreed to offer Apple iOS a 4-month exclusive deal for the well-known mobile game Plants vs. Zombies 2. The benefits of exclusivity deals for both platforms and digital service developers are unclear and have not been studied in the extant literature. We develop an analytical model of digital service profits to examine the optimal conditions of exclusivity for platforms and digital service developers. Our result shows that platforms prefer exclusivity while developers prefer offering their product on multiple platforms. We further explore the strategies that platforms and digital service developers can employ by analyzing three simultaneous and sequential game pricing and release scenarios. We find that higher profits can be generated by whichever party determines the price of a game first. However, we also found that in the presence of a leasing fee, platforms may prefer a simultaneous pricing and release scenario to even a platform-led pricing and release scenario. We conclude with implications for research and practice and suggestions for future research.",
keywords = "Digital service platform, Exclusivity, Network externalities, Two-sided market",
author = "Yang, {Yu chen} and Hao Ying and Yong Jin and Xin Xu",
note = "Funding Information: We thank James R. Marsden (Editor-in-Chief), Hong Guo, Shengli Li, Ting-Peng Liang, two anonymous reviewers and the participants at PACIS 2017, INFORMS International 2018, China Workshop on Economics of Information Systems Theory (CWEIST) 2019, for helpful discussions and useful suggestions. We particularly mourn the loss of Prof. Ting-Peng Liang as our lifelong mentor and wish Prof. Liang rest in peace. The work described in this paper was substantially supported by the funding for Projects of Strategic Importance of The Hong Kong Polytechnic University (Project Code: 1-ZE2D ). Yu-chen acknowledges the financial support of The Ministry of Science and Technology of Taiwan ( MOST 105-2410-H-110-022 ), and the Intelligent Electronic Commerce Research Center from the Featured Areas Research Center Program within the framework of the Higher Education Sprout Project by the Ministry of Education (MOE) in Taiwan. Xin and Yong acknowledge the support of PolyU FB Digital Transformation Centre , General Research Fund No. 15503719 (Hong Kong) and Natural Science Foundation of Guangdong Province General Program No. 2019A1515012095 . All errors are our own. Funding Information: We thank James R. Marsden (Editor-in-Chief), Hong Guo, Shengli Li, Ting-Peng Liang, two anonymous reviewers and the participants at PACIS 2017, INFORMS International 2018, China Workshop on Economics of Information Systems Theory (CWEIST) 2019, for helpful discussions and useful suggestions. We particularly mourn the loss of Prof. Ting-Peng Liang as our lifelong mentor and wish Prof. Liang rest in peace. The work described in this paper was substantially supported by the funding for Projects of Strategic Importance of The Hong Kong Polytechnic University (Project Code: 1-ZE2D). Yu-chen acknowledges the financial support of The Ministry of Science and Technology of Taiwan (MOST 105-2410-H-110-022), and the Intelligent Electronic Commerce Research Center from the Featured Areas Research Center Program within the framework of the Higher Education Sprout Project by the Ministry of Education (MOE) in Taiwan. Xin and Yong acknowledge the support of PolyU FB Digital Transformation Centre, General Research Fund No. 15503719 (Hong Kong) and Natural Science Foundation of Guangdong Province General Program No. 2019A1515012095. All errors are our own. Publisher Copyright: {\textcopyright} 2021 Elsevier B.V.",
year = "2021",
month = sep,
doi = "10.1016/j.dss.2021.113598",
language = "English",
volume = "148",
journal = "Decision Support Systems",
issn = "0167-9236",
publisher = "Elsevier B.V.",
}