The Platform Paradox: Why Your Best Partners Might Be the First to Join a Rival
By Johannes Loh (Vrije Universiteit Amsterdam) and Ambre Elsas-Nicolle (LMU Munich/Mines Paris)
Dominant platforms often assume their sheer size creates a “moat” that prevents partners from leaving. However, new research shows that platform growth is a double-edged sword: while it increases user reach, it also intensifies internal competition, driving certain partners straight into the arms of new rivals.
The Practitioner “So What”
Managers must realize that platform entry by a rival doesn’t just splinter the customer base—it reshapes partner psychology. To prevent defection, incumbents must balance the pursuit of collective platform goals with the individual survival needs of their most vulnerable partners.
The Research Context
The study examined the 2018 entry of the Epic Games Store (EGS) into the PC distribution market, which had been dominated by Steam. By analyzing over 11,000 games, researchers tracked how “Indie” developers and “Multiplayer” developers responded to a shift from monopoly to competition.
Key Findings
Market Entry & Visibility
Resource-poor partners seek “The Great Escape.” Partners with weak strategic resources (Indie developers) are significantly more likely to join a rival. For these firms, the “less crowded shelf” of a smaller entrant is more valuable than the hyper-competitive ecosystem of a dominant leader.
Network Interdependency
The Network Effect Trap. Partners whose products rely heavily on direct user interaction (Multiplayer developers) stay loyal to the incumbent. Because their product value is tied to a unified user base, they view a rival’s entry as a threat that fragmentizes their network.
Ecosystem Orchestration
Collective Action Breaks Down. After a rival enters, resource-poor partners become less willing to participate in the incumbent’s coordinated initiatives, such as platform-wide sales. In contrast, network-reliant partners become more responsive to orchestration, doubling down on the incumbent to ensure the ecosystem stays unified.
Managerial Action Plan
For Incumbents: Recognize that your biggest threat is internal competition. Provide visibility tools specifically for resource-poor partners to reduce their incentive to join rivals.
For Entrants: Use a “divide-and-conquer” strategy. Target partners who feel “suffocated” by the incumbent’s dominance early on to build your initial catalog.
For Platform Orchestrators: Adapt your governance style. Move away from “take-it-or-leave-it” rules toward incentives that align with the specific strategic needs of different partner types.
Original Article: Loh, J., & Elsas-Nicolle, A. (2026). Platform competition and strategic trade-offs for complementors: Heterogeneous reactions to the entry of a new platform. Strategic Management Journal.
Read the full academic paper here.
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