If this is all true, I find it hard to believe that either side will actually pull the plug on a relationship that has generated most of the top-10 most popular applications on Facebook. Without Facebook, Zynga could lose easy access to millions of its most regular users, and without Zynga, Facebook would lose several of the applications that keep its users coming back to the site so often.
Earlier, I wrote about a similar situation between Google and Apple. Now, I am wondering whether Prisoner's Dilemma is endemic in relationships within high-tech industries.
In his recent book, The Nature of Technology, W.B.Arthur showed that most of technology innovations require concerted efforts from multiple companies and individual contributors. It's highly unlikely that all of them will get rewarded by the market proportionally to their contributions. Quite the opposite, over a period of time a dominant player emerges and gets into a position to dictate the pace of innovation, and as a result, collects a much higher return on its technology investment. Google dominates search advertisement market, Intel - PC-related semiconductors, Microsoft - PC OS, Apple - portable audio and smartphones, Facebook - social networking, and etc.
I suggest that on its path to domination, a high-tech player has to build a series of coalitions (just because the technology contains multiple parts), and then, in Prisoner's Dilemma terms, defect from the cooperation strategy in order to claim the top spot.
Related: Hal Varian's talk on technology where he discusses the role of substitutes and complementers.
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