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Christopher Brickhouse

Platform Wars Experience

Professor. Pettibone

November 20, 2021

Platform Wars Experience

I will be reflecting on my game experience, relating it to the concepts in the textbook.

Then I will describe the actions taken and the results of those actions on how I beat my

competitor. Lastly, I will describe the nature of fixed, variable, and marginal costs, illustrate the

difference between production and investment decisions, and evaluate the impacts of direct and

indirect network externalities.

In this web-based simulation, I played the role of a senior manager at a video game

platform company like Nintendo, Sony, or Microsoft. I experienced the challenges of strategic

competition. Furthermore, this simulation is created and hosted by MIT’s Sloan School of

management; this simulation “explores the dynamics of competition in multi-sided markets."

"In such markets, success depends not only on a product’s price and features but on how

many people own it (a direct network externality) and on the number of games and applications

available. The size of the installed base of complementary products (an indirect network

externality). Platform markets are increasingly common in settings other than video games,

including computers, the Internet and e-commerce, and mobile telecommunications.”

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However, there are two common reinforcing feedbacks in platform markets. First, you

have Direct Network Externality, the utility product that increases with the size of the network of

other users. The second is Indirect Network Externality, the utility product that increases with the

number and variety of complementary products on the platform. For example, Sony PlayStation

Now vs. Microsoft Xbox Game Pass.

"PlayStation Now is a game subscription service that gives you access to hundreds of

games. With PS Now, you can stream PS4, PS3, and PS2 games instantly on PS5, PS4, and PC,

and download hundreds of PS4 games to play on your PS5 or PS4 console." "Xbox Game Pass is

the same thing, but a tad bit different. Xbox Game Pass includes all the benefits of Xbox Live

Gold, plus over 100 high-quality console and PC games. New games are added all the time, so

there’s always something new to play. It offers exclusive member deals and discounts, and you

can play together with friends on the most advanced multiplayer network and discover your next

favorite game."

During the first round of Platform Wars, I kept the Console Price constant. However, I

did change the price from 5-10 intervals each year. As you can acknowledge, the Console Price

starts at 250 for year 1; I decided to change the console price to 140. From this, my market share

and net income dropped dramatically. As I progressed over the years, changing my Console Price

from 140-180, my Net Income and Market Share quadrupled.

In my second round of Platform Wars, I kept the console price constant as well. However,

I changed the price from 190 to 200. From this, the competitor was able to compete with me. But

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by year 10, I was fifty percent higher than my competitor. Furthermore, if I wanted to increase

daily output, I could have lowered the price even more. According to Schiller B. (2016).

Essentials of Economics. McGraw-Hill., "labor is regarded as a variable cost in this line of work.

The cost varies with the rate of output. Now, the consoles themselves are another variable cost

(page 98)."

Videogame entertainment is an extensive social and online activity that children and

adults love to play with their friends. Depending on how much money people "spend" on games

nowadays (which is a lot, as Sony PlayStation 5s are out of stock) directly related to how many

consoles I need to produce. In this sense, the cost of consoles input varies with the rate of

console output.

In conclusion, Platform Wars and the textbook illustrates graphical diagrams. However,

the textbook is a more in-depth version and explains the data shown on the graphs thoroughly.

Platform Wars is more of a hands-on website software where you control and change the settings

to your likings.

References:

 Sterman, J. (n.d.). Platform wars: Simulating the Battle for Video Game Supremacy. MIT

Sloan. Retrieved November 27, 2021, from

https://mitsloan.mit.edu/LearningEdge/simulations/platform-wars/Pages/default.aspx.

 Sony. (2021). PS Now: On-demand PlayStation games on PS5, PS4 or PC. PlayStation.

Retrieved November 27, 2021, from https://www.playstation.com/en-us/ps-now/?

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emcid=pa-co-

421879&gclid=Cj0KCQiAy4eNBhCaARIsAFDVtI1HfGoOx5jKWwHLb8kz2wr8hMEA

oTdVqSmTn4EhCI6mP-V_hokl6goaAnJGEALw_wcB&gclsrc=aw.ds.

 Microsoft. (2021). Join Xbox game pass: Discover your next favorite game: Xbox.

Xbox.com. Retrieved November 27, 2021, from https://www.xbox.com/en-US/xbox-

game-pass.

 Gilbert, B. (2021, March 20). It's not just you: It's still nearly impossible to buy a

PlayStation 5. Business Insider. Retrieved November 27, 2021, from

https://www.businessinsider.com/playstation-5-still-sold-out-everywhere-2021-3.

 Schiller B. (2016). Essentials of Economics. McGraw-Hill.

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