Binken and Stremersch (2009) "The effect of Superstar Software on Hardware Sales in System Markets

9 important questions on Binken and Stremersch (2009) "The effect of Superstar Software on Hardware Sales in System Markets

Where does software availability refer to?

Not to software sales (demand) but to the catalog of software titles available for a particular hardware (supply)

Why does a superstar industry display increasing returns to quality?

Because of the scarcity of high quality

Why do competitors find it hard to copy the quality characteristics of other superstars? Especially after they have been introduced on the market?

Because the quality is often unknown until the product is in the hands of the consumer
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What do the authors expect with regard to superstars?

If superstars display increasing returns from software quality to software unit sales, we may expect superstars in system markets to display increasing returns from software quality to hardware unit sales. Supported, system owners should provide resources and pay software publishers to continue development to improve quality.

What do the authors expect with regard to software life cycles?

The introduction of a superstar software title affects hardware unit sales positively during the month of introduction and for a limited number of months after introduction. This effect has a peak during the month of introduction and then declines. Not supported: increase in first 5 months with a peak in the second to third month, displaying an inverted U-shaped effect over time. This different time pattern is likely due to the relative slower diffusion of information about superstars among non-adopters (i.e., potential hardware buyers) than among adopters (i.e., software buyers).

Along which three dimensions can video games be typified?

  1. Whether a superstar software title is exclusively available for only one system or for multiple systems to create a competitive advantage.
  2. Whether the software title is a sequel to be prequel for the same system
  3. The genre to which the superstar software title belongs.

What do the authors expect with regard to the superstar software title exclusively available for only one system or for multiple systems?

Exclusive superstar software titles have a larger effect on hardware unit sales of the system in question than nonexclusive superstar software titles. Not supported

What do the authors expect with regard to the software title to be a sequel to a prequel for the same system?

The introduction of superstar sequels has a larger effect on hardware unit sales than the introduction of original superstars. However, the effect could also be weaker because people might have already bought the hardware for the prequel in the time when there were also more potential adopters of the hardware.  Not supported

What do the authors expect with regard to the genre to which the superstar software title belongs?

The introduction of superstars from the large genres has a larger impact on hardware unit sales than the introduction of superstars from the small genres. Not supported

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