paTTerns 79 MulTi-sided plaTForMs One example is Metro , the free daily newspaper that originated in Stockholm and can now be found in many large cities worldwide. It launched in 1995 and immediately attracted a large readership because it was distributed free of charge to urban commuters in train and bus stations throughout Stockholm. This allowed it to attract advertisers and rapidly become profi table. Another example is Microsoft, which gave its Windows software development kit (SDK) away for free to encourage development of new applications for its operating system. The larger number of applica- tions attracted more users to the Windows platform and increased Microsoft’s revenues. Sony’s Playstation 3 game console, on the other hand, is an example of a multi-sided platform strategy that backfi red. Sony subsidized each console purchased in hopes of later collecting more game royalties. This strategy performed poorly because fewer Playstation 3 games sold than Sony initially estimated. Operators of multi-sided platforms must ask them- selves several key questions: Can we attract suΩicient numbers of customers for each side of the platform? Which side is more price sensitive? Can that side be enticed by a subsidized oΩer? Will the other side of the platform generate suΩicient revenues to cover the subsidies? The following pages outline three examples of multi- sided platform patterns. First, we sketch Google’s multi-sided platform business model. Then we show how Nintendo, Sony, and Microsoft compete with slightly diΩerent multi-sided platform patterns. Finally, we describe how Apple has slowly evolved into an operator of a powerful multi-sided platform. Segment B FACILITATE FACILITATE FACILITATE FACILITATE FACILITATE FACILITATE FACILITATE FACILITATE FACILITATE FACILITATE FACILITATE FACILITATE INTERACTION Segment N Segment N Segment N etc. etc. bmgen_final.indd 79 6/15/10 5:35 PM