Previous research has mainly focused on how the introduction of complements by platform owners impacts competition between the platform and third-party complementors. Rather than assuming that first-party complements replace third-party ones, we consider under what conditions a platform owner instrumentally introduces new complements that, while aimed at improving the platform’s appeal, also indirectly benefit complementors. We identify two mechanisms for this: (1) the platform owner showcases development knowledge, which lowers barriers for potential complementors, and (2) the platform owner helps restore a category’s declining strength, boosting demand. An analysis of the U.S. console video game industry from 1995 to 2005 shows that first-party complements occur under condition where either mechanism could strengthen the platform, and thus plausibly benefit third-party complementors and strengthen the overall platform ecosystem. These findings challenge the prevailing view by suggesting that first-party complements can generate indirect benefits for complementors rather than merely displacing them, and offer new insights into platform governance.
