Complementor-side Ecology and its Implications on Platform Strategy

Abstract

Understanding the complementor behavior and its implication is the key to understanding platform dynamics. By using theoretical guides of organizational ecology, this study analyzed complementor's various niche strategies and their implications. Using the data from game industry, our study shows that the initial entry strategy to increase the survival rate is to concentrate on a specific game genre. However, as the platform grows, the relationship between complementor platform niche width and the survival rate shows inverted-U shape. From the perspective of the platform owner, it would be very difficult to provide various kinds of services especially at the early stage of developing the platform if all the complementors become genre-specific. If many complementors choose to provide services to multiple platforms, it would be very difficult for the platform owner to provide services different from other platforms. We provide interpretations on various strategic implications of complementor dynamics to the platform strategy.