Online Game Supply Chain Coopetition With Product Substitution

ABSTRACT This study examines the coopetition decision‐making in an online game supply chain involving two online game development enterprises (the developers) and one online game sales platform (the platform). In supply chain cooperation, competing developers can cooperate with the platform either separately or collectively. In contrast to previous studies, this study not only examines online games, with their unique cost structures, but also innovatively uses product quality as a decision variable in the characterization of product demand. It begins by constructing decision‐making models that reflect three different coopetition situations among enterprises in the online game supply chain: a competition model, a separate bargaining model, and a collective bargaining model. Equilibrium analysis of the decision‐making models is then used to obtain the enterprises' optimal coopetition strategies, and to reveal how these strategies depend on product substitutability and bargaining power. Finally, a comparative analysis of the coopetition models is used to identify the optimal coopetition strategy in the online game supply chain and reveal this strategy's dependence on product substitutability, bargaining power, and internal operating capabilities. These findings provide strategic guidance for enterprises in the online game supply chain about how to pursue coopetition within various business environments.