Ben Gilbert: preference

Transcript context

…Keep going with scale economies. I agree. The reason scale economies jumped to mind is we just keep talking about on this episode without naming it. When we talk about things like Nintendo produced the most desirable console, which all the consumers bought, which then meant that Nintendo had power over its developers, that is a pure play scale economy, that a game was worth way more on Nintendo for the NES's distribution than it was worth anywhere else. If you're a developer, it almost doesn't matter how bad the terms are with Nintendo. You have to build for Nintendo because there's more money there, because it's amortized across so many different users of the platform that it's just always worth it. Okay, I totally agree with you. I think this is the number one source of power. Isn't this network economies, though? A two-sided network effect. The more users you have on your install base, the more attractive you are to the developers, the more in better 10X, 100X developers you have developing for your platform, the more likely you are to attract more users?…

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