Pricing strategies of competing platforms in the video game industry

This article analyzes pricing strategies in the video game industry with two players. The strategies are based on the Bertrand competition framework for the multi-homing conditions of game developers whether the platforms should fix their prices and whether they should sell to attract all users, core users or light users with pricing strategies for each player. This research shows that the main determinants of the price structure in the video game industry are the differences between core users and light users, and whether the game developers choose to multi-home. In the video game industry, the light users are the critical factor in determining the sales volume. These findings can help industry players make pricing decisions.