On top of the game? The double-edged sword ofincorporating social features into freemiumproducts
Freemium products requirewidespread diffusion for their success. One way to dothis is by incorporating social features (e.g., multiplayerfunctionality, virtual collaboration, ridesharing), whichcan generate network effects and result in a productbecoming asuperstar. However, social features can be adouble-edged sword: When demand potential forfreemium products is large, social features can signifi-cantly boost a product’s appeal resulting in more adop-tion, more usage, and more in-app purchases; butwhen demand potential is constrained, network effectsmight fall short and users may feel they are missing outon key aspects of the product. We test this dynamic ona sample of 9,700 digital games on Steam. Findingscontribute to our understanding of network effects,freemium strategies, and superstar products in platformmarkets.
