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How technological change affects power relations in global markets : remote developers in the console and mobile games industry

Parker, Rachel and Cox, Stephen and Thompson, Paul (2014) How technological change affects power relations in global markets : remote developers in the console and mobile games industry. Environment and Planning A, 46 (1). 168–185. ISSN 0308-518X

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Abstract

This paper focuses on Australian development firms in the console and mobile games industry in order to understand how small firms in a geographically remote and marginal position in the global industry are able to relate to global firms and capture revenue share. This paper shows that, while technological change in the games industry has resulted in the emergence of new industry segments based on transactional rather than relational forms of economic coordination, in which we might therefore expect less asymmetrical power relations, lead firms retain a position of power in the global games entertainment industry relative to remote developers. This has been possible because lead firms in the emerging mobile devices market have developed and sustained bottlenecks in their segment of the industry through platform competition and the development of an intensely competitive ecosystem of developers. Our research shows the critical role of platform competition and bottlenecks in influencing power asymmetries within global markets.