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 integrateexternal sources of knowledge. However, finding the rightdegree of openness is challenging, especially in complex open innovationecosystems. The interdependencies and dynamics relatedto the choice of openness are not well-understood. This paper investigatesthe role of openness as a competitive mechanism. Specifically,we research how openness affects firms’ interactions withuser communities and how it changes the preference structure ofcustomers. We build a longitudinal case study in the open sourcegaming handheld industry and trace the evolution and the dynamicsof firms, user communities, and their interactions. We find thata suboptimal level of openness can pose a threat to a firm’s very existence.Further, we identify repeated patterns characterizing thedynamics in the ecosystem. Based on these patterns, we propose aframework of the dynamics of openness. Our paper contributes tothe literature on open innovation. We illuminate the relevance andthe dynamics of openness as a dimension for competition. This paperalso contributes to the literature on user innovation by showinga shift from manufacturer-based to user-based innovation over thecourse of the product lifecycle.