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MULTI-SIDED PLATFORMS

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G(,<(%6=# One example is Metro, the free daily newspaper that Operators of multi-sided platforms must ask them-
originated in Stockholm and can now be found in selves several key questions: Can we attract suΩicient PATTERNS
many large cities worldwide. It launched in 1995 and numbers of customers for each side of the platform?
immediately attracted a large readership because it Which side is more price sensitive? Can that side
was distributed free of charge to urban commuters be enticed by a subsidized oΩer? Will the other side
in train and bus stations throughout Stockholm. This of the platform generate suΩicient revenues to cover
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profi table. Another example is Microsoft, which gave
The following pages outline three examples of multi-
its Windows software development kit (SDK) away
for free to encourage development of new applications
for its operating system. The larger number of applica- sided platform patterns. First, we sketch Google’s
multi-sided platform business model. Then we show
(65U tions attracted more users to the Windows platform how Nintendo, Sony, and Microsoft compete with
and increased Microsoft’s revenues. Sony’s Playstation slightly diΩerent multi-sided platform patterns. Finally,
3 game console, on the other hand, is an example of we describe how Apple has slowly evolved into an
(65U a multi-sided platform strategy that backfi red. Sony operator of a powerful multi-sided platform.
subsidized each console purchased in hopes of later
collecting more game royalties. This strategy performed
poorly because fewer Playstation 3 games sold than
G(,<(%6=H Sony initially estimated.
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