If your buddies use Xbox Live and you want to play against them, you’re more likely to buy an Xbox. However, the Xbox Live network that allows users to play against each other has same-side benefits. Xbox 360 benefits from cross-side benefits in that more users of that console attract more developers writing more software titles and vice versa. It is possible that a network may have both same-side and cross-side benefits. And app availability is one of the most significant advantages the iPhone offers over competitive hardware.

Game availability is the main reason the Sony PlayStation 2 dominated over the original Xbox. In the game console market, more users of a console attract more developers who write more software for that console, and that attracts more users. Video game consoles, however, are considered a two-sided network, where significant benefits come from two distinct classes of users that add value from cross-side benefits by attracting their opposite group. IM is considered a one-sided market, where the value-creating, positive-feedback loop of network effects comes mostly from same-side benefits from a single group (IM members who attract other IM members who want to communicate with them). The Positive Feedback Loop of Network Effects When an increase in the number of users on one side of the market (console owners, for example) creates a rise in the other side (software developers), that’s called a cross-side exchange benefit. Mobile Value Added Services (MVAS) Market to Hit USD 309.1 Billion at a 15.3 CAGR by 2025 - Report by Market Research Future (MRFR) According to a comprehensive research report by Market Research. Economists would call this kind of network a two-sided market (network markets comprised of two distinct categories of participant, both of which that are needed to deliver value for the network to work). Software developers write games based on their ability to reach the greatest number of paying customers, so they’re most likely to write for the most popular consoles first. People buy a video game console largely based on the number of really great games available for the system. Economists would call IM a one-sided market (a market that derives most of its value from a single class of users), and the network effects derived from IM users attracting more IM users as being same-side exchange benefits (benefits derived by interaction among members of a single class of participant).īut some markets are comprised of two distinct categories of network participant. You pretty much choose one IM tool over another based on how many of your contacts you can reach.

While there might be some add-ons for the most popular IM tools, they don’t influence most users’ choice of an IM system. An example of this kind of network is instant messaging (IM). Some networks derive most of their value from a single class of users.

To understand the key sources of network value, it’s important to recognize the structure of the network.

1 one mobile market