Dividing network externality into the number of peers and users: Focusing on sociability and enjoyment in online games

Purpose Even though network externality plays an important role in users' motivations to use services or products, the implications of this are not clear because previous studies did not distinguish between the number of peers and the number of total users. Thus, the purpose of this paper is to demonstrate that there is a difference between the two network externalities, i.e., the number of peers and the total number of users. To accomplish this, the perception of quality of life is considered to have an impact on the effects of the two different network externalities. Design/methodology/approach Data were collected from a survey that covered 508 online game players in South Korea, and the two hypotheses of player experience of need satisfaction from self-determination theory as well as user gratification theory (UGT) were assessed using structural equation modeling. Findings The results indicate that people consider the total number of users and the number of peers differently. In addition, the effects of the total number of users and the number of peers vary according to respondents' perceived life quality in four dimensions: loneliness, happiness, satisfaction with life (SWL), and escapism. In particular, people's offline tendencies are reflected online in terms of loneliness, whereas online life compensates for a lack of enjoyment offline. Originality/value The authors verify that UGT can affect the network externality by considering perceived quality of life (loneliness, SWL, happiness, and escapism) as a moderating effect.