The role of complementary products on platform adoption: Evidence from the video console market

• Interdependences within platform-based markets are highly important.
• Technology platforms are part of complex architectures with complementary products.
• Complementary product portfolios have an impact on platform adoption.
• Differences exist between the effects of in-house and third-party complementary products.

This paper studies the importance of the interdependences within platform-based markets. Specifically, the work examines the influence of complementary product portfolios on the adoption of platforms by individuals. The study analyzes data from a panel of 17 video game platforms in three regions (the US, Japan and Europe) for the period between 1989 and 2011. The results suggest that platform adoption is driven by the availability and users of complementary products. The study also finds that this impact is stronger when platform providers jointly manage the in-house complementary product portfolio and the platform. These findings reveal that decisions on complementary products act as strategic drivers of adoption in platform-based markets.