The determinants of network effects: Evidence from online games business ecosystems

Abstract

This paper explores the determinants of network effects of the two-sided online games market. We have used the Massively Multiplayer Online Role-Playing Games (MMORPG) industry as the empirical context to explore these network effect determinants. With an inductive, qualitative case study on the MMORPG ecosystem, we have developed an integrated framework combining network structural characteristics (strong tie communication and weak tie creation) and network functioning characteristics (value-informed pricing and accessory diversification), which are the key determinants of network effects. Furthermore, business ecosystem characteristics, such as internal and external resource support, will moderate and strengthen such relationships. This article not only contributes to the determinants of network effect theories, but also has implications for the practitioners in the MMORPG industry.