Product Strategy on Digital Platforms: The Case of Product Design and Product Introduction on Steam

Digital platforms have been transforming market structures, with significant implications for firm strategies. First, in many cases, the emergence of digital platforms has reduced barriers to user participation, resulting in a large number of users participating in product development, who likely shift the locus of innovation and nature of competition. Second, digital platforms enable firms to access directly their end users, thereby enabling the firms to bypass the middle stages along the value chain and bring their products and services to consumers directly. These changes in market structure, in turn, necessitate firms to refine strategies and/or craft new strategies. Strategy changes in these market structures have not been adequately addressed in the extant strategy literature. I focus on firms’ product strategy, a central element of a firm’s competitive strategy on digital platforms. I examine two important aspects of product strategy: product design and product introduction. I ask two research questions: a) Under what conditions does a firm choose open over proprietary architecture for product design on the digital distribution platform? and b) How is solo versus joint new product introduction related to market performance on the digital distribution platform? I utilize Teece’s complementary assets framework to address these questions. I examine multiple sources of complementary assets to the firms that compete on digital platforms: users, traditional downstream actors, and the platform. I explore my research questions in the context of Steam, a digital distribution platform for PC games.

Many thanks to Xiumei’s dissertation committee: • Committee Chair: VK Narayanan - Professor - Drexel University • Committee Member: Jade Lo - Associate Professor - Drexel University • Committee Member: Jeongsik Lee - Assistant Professor - Drexel University • Committee Member: Jeffrey Greenhaus - Professor - Drexel University • Committee Member: Mian Dai - Associate Professor - Drexel University