Outsourcing Game Software: A Longitudinal Study ofMake-or-Buy Decisions in U.S. Videogame Industry

摘要

When a software provider releases its software to a platform, it is important to decide not only which platform to choose butrnalso how to release it. This paper investigates a videogame publisher’s strategic decision to provide its videogame titles torneach game platform. Specifically, this paper focuses on a game publisher’s outsourcing decision regarding its game releases.rnCombining transaction cost theory with theories concerning modularity and network effects, the paper examines therndeterminants of a game publisher’s make-or-buy decision. Then, this paper empirically tests the impact of each determinantrnwith the videogame titles data from 1991 to 2002. The results give a foundation for future research issues regarding thernapplication of transaction cost theory to the context of modular system architecture and network-based competition, whichrnare the key characteristics of the IT industry, and call for new determinants of the make-or-buy decision.