Platform Selection of Video Game Software in Japan: Some Empirical Results
This paper considers the platform selection of game developers in the Japanese home video game industry. Recently, literature can be found which deals with hardware-software relationships in two-sided markets. There has however generally been little empirical analysis of the factors determining a software developer’s decision of which platform to release new software for. This paper examines this decision by using the mixed logit model, allowing for random taste variation across game developers in their sensitivities to the characteristics of platform providers. It has been found that game developers are more likely to release game titles for the dominant platform, which indicates the presence of indirect network effects stated in two-sided market literature.