Digital Innovation, Entrepreneurship, and New Business Models
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Paper Number
2672
Paper Type
Completed
Description
The cloud gaming service (e.g., Google Stadia) is an emerging business that delivers game screen as streamed video to customers through the internet. Customers are endowed with the option of gaming on the cloud or staying with traditional consoles (e.g., Sony PlayStation). Hence, it becomes important for both the cloud gaming and console services to analyze the decision-making process of customers while optimizing their prices. Even though it is becoming an important problem for these service providers, it has not been analyzed rigorously in the literature. In this paper, we attempt to fill this important gap by analyzing the competition between the cloud gaming and console services in a game-theoretical setting. Our results show that revenues of console service providers are not necessarily hurt if customers’ valuation of the strengths of cloud services is higher. Besides, cloud gaming services do not always benefit from a higher percentage of core customers.
Recommended Citation
Dong, Yuan and Kumar, Subodha, "Traditional vs Cloud-Based Services: A Game Theoretical Analysis" (2021). ICIS 2021 Proceedings. 23.
https://aisel.aisnet.org/icis2021/dig_innov/dig_innov/23
Traditional vs Cloud-Based Services: A Game Theoretical Analysis
The cloud gaming service (e.g., Google Stadia) is an emerging business that delivers game screen as streamed video to customers through the internet. Customers are endowed with the option of gaming on the cloud or staying with traditional consoles (e.g., Sony PlayStation). Hence, it becomes important for both the cloud gaming and console services to analyze the decision-making process of customers while optimizing their prices. Even though it is becoming an important problem for these service providers, it has not been analyzed rigorously in the literature. In this paper, we attempt to fill this important gap by analyzing the competition between the cloud gaming and console services in a game-theoretical setting. Our results show that revenues of console service providers are not necessarily hurt if customers’ valuation of the strengths of cloud services is higher. Besides, cloud gaming services do not always benefit from a higher percentage of core customers.
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