Profiting from Innovative User Communities: How Firms Organize the Production of User Modifications in the Computer Games Industry

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    Abstract

    Modding - the modification of existing products by consumers - is increasingly exploited by manufacturers to enhance product development and sales. In the computer games industry modding has evolved into a development model in which users act as unpaid 'complementors' to manufacturers' product platforms. This article explains how manufacturers can profit from their abilities to organize and facilitate a process of innovation by user communities and capture the value of the innovations produced in such communities. When managed strategically, two distinct, but not mutually exclusive business models appear from the production of user complements: firstly, a manufacturer can let the (free) user complements `drift' in the user communities, where they increase the value to consumers of owning the given platform and thus can be expected to generate increased platform sales, and secondly, a manufacturer can incorporate and commercialize the best complements found in the user communities.
    Original languageEnglish
    Place of PublicationKøbenhavn
    PublisherInstitut for Industriøkonomi og Virksomhedsstrategi, Handelshøjskolen i København
    Number of pages30
    ISBN (Print)8778690978
    Publication statusPublished - 2004
    SeriesWorking Paper / Department of Industrial Economics and Strategy. Copenhagen Business School
    Number2004-03
    ISSN1398-7461

    Keywords

    • Innovation
    • Modding
    • User communities
    • Software platform
    • Business model

    Cite this

    Jeppesen, L. B. (2004). Profiting from Innovative User Communities: How Firms Organize the Production of User Modifications in the Computer Games Industry. Institut for Industriøkonomi og Virksomhedsstrategi, Handelshøjskolen i København. Working Paper / Department of Industrial Economics and Strategy. Copenhagen Business School, No. 2004-03