The Dynamics of Openness and the Role of User Communities: A Case Study in the Ecosystem of Open Source Gaming Handhelds

To remain competitive, it is critical for firms to integrate
external sources of knowledge. However, finding the right
degree of openness is challenging, especially in complex open innovation
ecosystems. The interdependencies and dynamics related
to the choice of openness are not well-understood. This paper investigates
the role of openness as a competitive mechanism. Specifically,
we research how openness affects firms’ interactions with
user communities and how it changes the preference structure of
customers. We build a longitudinal case study in the open source
gaming handheld industry and trace the evolution and the dynamics
of firms, user communities, and their interactions. We find that
a suboptimal level of openness can pose a threat to a firm’s very existence.
Further, we identify repeated patterns characterizing the
dynamics in the ecosystem. Based on these patterns, we propose a
framework of the dynamics of openness. Our paper contributes to
the literature on open innovation. We illuminate the relevance and
the dynamics of openness as a dimension for competition. This paper
also contributes to the literature on user innovation by showing
a shift from manufacturer-based to user-based innovation over the
course of the product lifecycle.