Winning the Hardware Software Game Winning the Hardware-Software Game - 2nd Edition

Using Game Theory to Optimize the Pace of New Technology Adoption
  • How do you encourage speedier adoption of your product or service?
  • How do you increase the value your product or service creates for your customers?
  • How do you extract more of the value created by your product or service for yourself?



  • The purpose of this analysis is to better understand the dynamics of internet platforms. The analysis considers the three basic types of platforms:

    • Vendors (WalMart, Apple, Pandora, etc.)
    • Social Media (Facebook, LinkedIn, YouTube, etc.)
    • Matchmakers (eBay, Uber, etc.)

    And will seek to address such issues as

    • Who are the different players in each type of platform game? 
    • How do the players' actions combine to generate value in each type of game?
    • Who extracts what value?
    • Which types of platforms and configurations have the greatest value potential? 
  • Remember when restaurant delivery options included Domino’s, Pizza Hut, or Papa John’s? No longer! These pizza restaurants still have a majority share of the restaurant delivery market. However, GrubHub, Eat24, DoorDash, UberEats, and other restaurant delivery platforms are expanding users’ choices beyond just pizza.

    This analysis examines the Restaurant Delivery Game: Who are the Players and what are the issues?


    See Figure 1


    • Traditional (Dine-In) Restaurants
    • Takeout/Delivery Restaurants

    ♦ Takeout/Delivery Only (Virtual Restaurants)

    ♦ Dine-in or Takeout

  • Key Concepts

    Before we can understand the issues related to 360°, 3D, AR and VR technologies, we have to understand some key concepts.

    Immersion and Presence

    The goal of 360°, 3D, AR and VR technologies is to immerse users in an environment, so that they feel they have been “teleported” to this new locale and are actually present in this new world. Achieving immersion and presence requires that the brain be fooled by the senses into believing it is somewhere that it really is not.

    Here are descriptions of immersion and presence by some other sources:

    Reality Technologies:

    Total immersion means that the sensory experience feels so real, that we forget it is a virtual-artificial environment and begin to interact with it as we would naturally in the real world.

    Virtual reality immersion is the perception of being physically present in a non-physical world. It encompasses the sense of presence, which is the point where the human brain believes that is somewhere it is really not, and is accomplished through purely mental and/or physical means. The state of total immersion exists when enough senses are activated to create the perception of being present in a non-physical world.

    a sense of immersion (i.e. convincing the human brain to accept an artificial environment as real).

    iQ by Intel:

    … presence: “The unmistakable feeling that you’ve been teleported somewhere new.

    VR Lens Lab

    … presence. That is, the ability to take you somewhere other than where you really are, and trick your mind into believing it.

    Jonathan Strickland at How Stuff Works

    In a virtual reality environment, a user experiences immersion, or the feeling of being inside and a part of that world.

  • The future of jobs is a serious concern.

    The most popular opinion I’ve seen is that the answer is more education. Consider, though, that we are in a period in which historically high levels of the population have some amount of postsecondary education. Yet, less than half the population (about 42%) has at least an associate’s degree, and only about a third of the population has at least a bachelor’s degree. How much higher is it realistic to think these levels can actually go? Not to mention that student debt has reached massively unsustainable levels ($1.3 trillion).

    So then what about the other half of the population?

    I recently did an analysis of changes in employment by firm size over the past few decades. My analysis showed that

    • Increasing percentages of employees have been employed in large firms, at the expense of employees in small firms.
    • New firm creation has increasingly come from openings of smaller firms, while consolidation has been rampant among the largest firms.
    • The economy has become less dynamic than it was during the 1990s, with relatively greater decreases in job activity at smaller firms.

    Taken overall, the data are consistent with economic/market conditions that

    • Are less hospitable to firms overall, and
    • Favor small firms for new innovations, but large firms for continued market success.

    Factors consistent with this environment include

    • More regulations, capture by special interests, and/or uncertainty over-all that inhibit business activity;
    • Regulations, capture by special interests,  and/or uncertainty that favor large firms over small firms (e.g., Obamacare, bank regulations that favor large and/or less risky loans over small/more risky loans, minimum wage laws, etc.);
    • Bureaucracy in larger firms that prevents new ideas from developing and/or gaining traction; and